Evli Target Maturity Nordic Bond 2023

Fixed-period fund that invests in Nordic corporate bonds

NAV
22.09.2022
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
95.024 -1.27 -1.19 1.27 - 1.21
NAV
22.09.2022
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
104.143 -1.27 -1.19 1.27 - 1.21
NAV
22.09.2022
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
95.719 -1.09 -0.94 1.52 - 1.46
NAV
22.09.2022
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
105.028 -1.09 -0.94 1.52 - 1.46
NAV
22.09.2022
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
96.325 -0.98 -0.79 1.67 - 1.61
NAV
22.09.2022
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
105.562 -0.98 -0.79 1.67 - 1.61

Risk

3/7

Morningstar

0/5

Recommended Investment Horizon

Until December 31, 2023, when the fund’s fixed-period investment strategy ends

Administrative fees

0.85 % p.a.

Suitable for investors

  • who want to benefit from the competitive performance of the Nordic corporate bond market
  • who prefer a stable Nordic political and economic operating environment
  • who want to benefit from Evli’s expertise in Nordic corporate bonds
  • who want to benefit from the fund’s easy and effective buy-and-hold strategy
  • who prefer the fund's active approach to responsible investment
  • who are prepared to commit to the fund until December 31, 2023, when the fund's fixed-period investment strategy will end
  • who want to invest responsibly and take into account not only economic analysis but also environmental, social and good governance (ESG) factors.

Invest

min. 1 000 €

Investment Policy 

Evli Target Maturity Nordic Bond 2023 Fund is a long-term corporate bond fund that invests mainly in bonds issued by Nordic companies, financial institutions and other organizations. The investments are made in rated investment grade and high yield bonds and unrated corporate bonds. The fund may also invest its assets in derivatives contracts both for hedging purposes and within the fund’s investment strategy.

The fund has a fixed-period investment strategy that will end on December 31, 2023, at the latest. In general, the fund’s investments are passive holdings.

 

The portfolio is managed by

Jani Kurppa

Jani Kurppa

Juhamatti Pukka

Juhamatti Pukka

Investment Objective and Risks

The fund’s goal is to achieve a roughly three percent annual yield over the long term. The fund does not have an official benchmark index. The yield expectation and risk of the fund is higher than that of funds that invest solely in government bonds.

The fund does not require its investments to be credit-rated, which means that the fund's investments are subject to an average or high credit risk. The credit risk arising from individual issuers is reduced by diversifying the investments among various issuers.

The fund’s investments carry a credit risk

Credit risk originates from a bond issuer’s ability to repay the bond’s coupons and capital on the maturity date. In the fund’s investments, the default risk arising from an individual issuer is reduced by diversifying the investments among various issuers. The risk premium (credit margin) required by investors varies during the bonds’ exercise period according to the market conditions and factors related to individual issuers.

As the credit risk grows, the values of the bonds in the portfolio decrease and vice versa. Lower credit-rated High Yield bonds, in particular, carry a significant credit risk.

The fund’s value is affected by interest rate risk

A decrease in interest rates raises the value of the fund, while an increase reduces the value of the fund. Interest rate risk may be measured with the average remaining exercise period (duration). Interest rate risk indicates how sensitive the value of the fund is to changes in interest rates. Long-term fixed income funds are much more sensitive to interest rate movements than money market funds. The value of the fund may fluctuate heavily if there are substantial changes in interest rates.

Monthly review

31.08.2022

Volatility in the rates market continued. Expectations for the peak inflation timing are moving forward and electricity prices saw a spike higher. ECB hiking expectations are increasing as a result. The Nordic market is less sensitive to rate movements, as the SEK and NOK markets are largely floating rate note markets. Also, the fixed coupon bonds are typically shorter in maturity than in Europe. 2022 Q2 results have been good from the Nordic companies.

The August return was +0.67% as spreads tightened. The fund does not hold any Russian companies and exposure to Russian sales is very small. Direct negative exposure to higher energy prices is also very small. The portfolio yield level is around 5.4%.

Fund facts

Type of fund Nordic corporate bond fund (UCITS)
Investment activity began 06.05.2019
Benchmark index

No official benchmark index

Profit distribution Fund-units are divided into A and B units. Profit share of at least 3% is distributed on A units annually.

Responsibility and consideration of sustainability factors

Sustainability information in accordance with Articles 6 and 8 of the EU SFDR regulation 2019/2088 (sustainability‐related disclosures in the financial services sector).

The fund promotes environmental and social characteristics in accordance with Article 8 of the SFDR.

Sustainability risks are taken into account in investment decisions

When building and monitoring the fund’s investment portfolio, traditional financial and other key indicators, such as risk and valuation indicators, and also sustainability risks are taken into account in investment decisions. In addition to the analysis made in connection with investment decisions, the sustainability risk is managed with the exclusion of certain sectors and/or companies. When realized, material sustainability risks can affect the financial performance of the fund’s investment instruments, and therefore the fund’s return.

Excluding certain sectors and/or financial instruments from investment can reduce the fund’s sustainability risk. It can, however, increase the fund’s concentration risk. A potential increase in concentration risk, taken in isolation, may lead to greater volatility and increase the risk of loss.

Environmental and social characteristics

In addition to other characteristics, the fund promotes environmental and social characteristics in accordance with Evli's Principles for Responsible Investment and requires that target companies observe good governance.

The fund’s target companies are analyzed before an investment decision is made and at regular intervals during the investment period with regard to environmental, social and corporate governance matters, or ESG factors. ESG factors are integrated into the analysis of target companies and their selection for investment by the fund.

Evli has built an internal ESG database based on data produced by MSCI ESG Research and ISS ESG, which it uses to monitor ESG factors. For each fund an ESG score is calculated, reflecting how well the companies a fund has invested in have taken sustainability risks and opportunities into consideration as a whole. The indicators also include company-specific ESG scores and their development, information on any UN Global Compact violations, the company’s reputation risk, carbon footprint and the proportion of fossil reserves. Evli also engages with target companies in accordance with Evli's ownership control principles. Engagement may be motivated by violations of UN Global Compact norms or reasons related to climate goals.

The fund’s carbon footprint and emission indicators are measured and monitored, and a regular scenario analysis is conducted to monitor the attainment of Evli's general climate targets. Evli's goal is to achieve carbon neutrality by 2050 at the latest, and it has set a target of a 50 percent reduction in indirect emissions from investments by 2030, provided that this is possible in the investment environment. The comparison year is 2019. The attainment of the climate targets will be measured using data from ISS ESG and MSCI ESG to monitor the fund’s carbon footprint and intensity, the degree of low-carbon transition, a scenario analysis in relation to the 1.5 degree warming target and the warming ratio associated with the fund.

The EU Taxonomy Regulation defines economic activities that are environmentally sustainable. In order for an economic activity to be considered environmentally sustainable under the EU Taxonomy Regulation it must not, in addition to contributing to one or more environmental objectives, cause significant harm to other environmental objectives mentioned in the Regulation. The “do no significant harm” principle applies only to those investments underlying the financial product that take into account the EU criteria for environmentally sustainable economic activities. The investments underlying the remaining portion of this financial product do not take into account the EU criteria for environmentally sustainable economic activities. The Fund is not committed to making sustainable investments in accordance with the EU Taxonomy Regulation.

Good governance policy

An assessment of the quality of corporate governance is an important part of the assessment of potential investments.

Evli's ownership control principles require that the companies it invests in engage in good governance by complying with the Finnish Corporate Governance Code issued by the Securities Market Association, for example, or corresponding foreign guidelines, which often impose a partial framework on the remuneration models of the invested companies. In addition, Evli's Responsible Investment Team analyses the fund's investments every three months for any breaches of norms (UN Global Compact and OECD’s guidelines for multinational companies). The OECD's guidelines for multinational companies also cover disputes related to taxation. Consequently, such disputes may lead to the exclusion of an investment instrument.

ESG strategy

Various factors related to a company are taken into account when making investment decisions. ESG factors are a key part of risk analysis and investment decisions. Evli's Principles for Responsible Investment and Climate Change Principles establish a framework for its investment activities. Portfolio managers carry out analyses of the companies and their ESG-associated risks. The Responsible Investment Team supports the portfolio managers in their work, and Evli's Responsible Investment Steering Group makes decisions on the framework of responsible investment. Evli also has an internal ESG database which combines the responsibility data of the companies in which investments are made from various data sources.

Our responsibility reporting comprises fund ESG reports, customer-specific ESG reports, and the Responsible Investment Annual Report. Evli also reports on the promotion of environmental and social characteristics in accordance with the SFDR as part of the mutual funds’ annual review.

The Principles for Responsible Investment, the Climate Change Principles and the exclusion consensus criteria apply to all direct investments made by the fund.

The fund can use derivatives or other strategies occasionally, regularly, extensively or not at all. Its key investor information document (KIID) includes information on how often and for what purpose derivatives are used. Such investments are not covered by ESG requirements. 

Evli’s Principles for Responsible Investment and exclusion

Evli's Principles for Responsible Investment define the basic standards for norm-based screening and exclusion of companies. Investments are regularly monitored with respect to the UN Global Compact principles. If the target company is found to violate the principles related to human rights, labor standards or the environment or actions against corruption as defined in the UN Global Compact initiative, Evli will engage with the company or exclude it from investments. On the basis of regular monitoring, Evli's Responsible Investment Team will take the necessary measures with respect to companies that are suspected of having violated international laws and regulations. Such companies can either be excluded directly or Evli can engage with them. If dialogue with a company fails or is deemed to be unhelpful, the company may be added to the exclusion list.

In accordance with Evli’s general exclusion principles, manufacturers of controversial weapons (landmines, cluster munitions, nuclear weapons, depleted uranium, chemical weapons and biological weapons) with a 0 percent revenue threshold, as well as tobacco manufacturers and producers of adult entertainment and companies involved in controversial lending (including so called pay-day lenders) with a 5 percent revenue threshold are excluded from the fund. In line with Evli's Climate Change Principles, the fund monitors the greenhouse gas emissions of its investments and avoids investing in companies in which at least 30 percent of revenue comes from extraction of thermal coal, use of thermal coal in energy production or the extraction of oil sands. This exclusion may be waived if the company has a clear plan to change its operations. In addition, companies producing peat for energy production are excluded.

In addition to the fund's own exclusion principles, the fund excludes alcohol and weapons and firearms manufacturers with a 5 percent revenue limit, gambling companies and fossil fuel mining, extracting and drilling companies from its investments.

Benchmark index and fund responsibility profile

The fund does not have a benchmark index.

Read more about Evli's responsible investing

Downloadable files

Invest

min. 1 000 €