Evli Short Corporate Bond

Fixed income fund that invests in short-maturity corporate bonds in a diversified manner

NAV
28.09.2023
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
14.469 3.83 5.77 0.10 0.16 1.85
NAV
28.09.2023
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
29.285 3.83 5.77 0.10 0.16 2.15
NAV
28.09.2023
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
103.637 3.98 5.98 0.30 0.36 0.53

Risk

2/7

Morningstar

5/5

Recommended Investment Horizon

at least 2 years

Administrative fees

0.55 % p.a.

Suitable for investors

  • who wish to get a steady capital appreciation with low volatility
  • who wish to get a better return than the traditional money market funds or bank deposits can offer
  • who wish to get an actively managed and well diversified fixed income portfolio in a single product
  • who wish to invest their assets without high credit risk
  • who do not wish to tie-up their capital for a defined time period
  • 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 Short Corporate Bond Fund is a corporate bond fund that invests its assets primarily in euro-denominated bonds with a short and medium-term remaining duration issued by European companies and banks, and in other interest-bearing investments. The investments will be made in bonds with both higher (Investment Grade) and lower (High Yield) credit ratings. The fund generally hedges the currency risk associated with non-euro-denominated investments.

 

The portfolio is managed by

Juhamatti Pukka

Juhamatti Pukka

Investment Objective and Risks

The aim is to achieve a return which exceeds the return of the benchmark during a 12-month investment horizon.

The level of diversification in the investment portfolio is large both within every fixed income asset class and between the asset classes which keeps the fund’s overall risk moderate. A particular characteristic of the fund is to achieve a high risk adjusted return by a large diversification among none or low correlating fixed income assets and by an active reallocation of assets among these asset classes.

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 fund’s floating-rate bond investments are susceptible to changes in risk premiums, the fund’s value may fluctuate.

The fund’s value is affected by interest rate risk

As money market funds carry a small interest rate risk, the effect of interest rate risk on the fund’s performance is small.

Monthly review

31.08.2023

The credit market was in a sideways mode in August after the summer's tightening period. Macro-economic data provided food for thought both for hawks and doves with the H2 monetary policy path predictions. Consensus is now tilted towards a pause in hikes in the September meetings. German 2- and 5-year yields moved 6 bps lower in August, while IG and HY yield spreads widened by 8 and 12 bps, respectively.

The fund netted 0.24% (B series) in August and took YTD performance to 4.11%, continuing the 8-month long streak of positive monthly returns. By sector, the best performers were Financial Services, Healthcare and Consumer Goods, while Automotive, Basic Industries and Airlines lagged the broad market. We participated selectively in primary market issues adding e.g. Nibe 2027, Continental 2027, Caterpillar 2026 and Amprion 2028 bonds into the fund.

We anticipate the primary market to be active during the fall, offering many opportunities to selectively add new attractively priced names into the portfolio. As a result of the inverted yield curve and relatively wide spreads, the yield to maturity is well above 5%, which provides a very good basis for H2 total return.

Fund facts

Type of fund Short-maturity corporate bond fund (UCITS)
Investment activity began 17.05.2004
Current strategy since 01.06.2012
Benchmark index 3 month Euribor
Profit distribution Fund-units are divided into A and B units. Profit share of at least 1.75% is distributed on A units annually.

Sustainability-related disclosures

Financial product’s sustainability information in accordance with EU Sustainable Finance Disclosure Regulation (SFDR) 2019/2088 (sustainability‐related disclosures in the financial services sector). This is a financial product in accordance with Article 8 of the SFDR.

Publication date: December 1, 2022
Legal Entity Identifier: 743700SXX2ZOCK35W726

a) Summary

Read the summary in NL, ET, FR, DE, IT, LV, LT, NO, PT, ES

This financial product promotes environmental or social characteristics, but does not have as its objective sustainable investment.

The fund promotes climate change mitigation by investing at least 2 percent of its total investments in activities that are environmentally sustainable economic activities under the EU Taxonomy Regulation (2020/852). For an economic activity to be environmentally sustainable under the Taxonomy Regulation, it must not cause significant harm to other environmental objectives. Environmentally sustainable investments are in line with the OECD Principles for Multinational Enterprises and the UN Global Compact and the UN Guiding Principles on Business and Human Rights.

Environmental and social characteristics are promoted by observing Evli’s Principles for Responsible Investment, Climate Change Principles and climate targets, and by requiring that target companies observe good governance practices. The fund excludes harmful industries on the basis of Evli’s responsibility principles and Climate Change Principles. In addition, target companies are monitored regularly to ensure they have not violated the norms of specific international treaties and principles.

The fund promotes climate change mitigation in accordance with Evli’s climate targets: 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 an interim target of a 50 percent reduction in indirect emissions from all investments by 2030, provided that this is possible in the investment environment. The comparison year is 2019. The fund-specific share of the emission reduction target may vary between funds.

Investment targets are monitored regularly, and efforts are made to engage with companies to influence their practices. Evli can engage with companies either independently or together with other investors. The themes of Evli’s engagement are climate change mitigation, respect for human rights, anti-corruption measures, taking environmental issues into consideration, factors related to good governance and the reporting of responsibility factors. Evli’s Responsible Investment Policy and Corporate Governance Principles set the framework for Evli’s engagement and conduct in the event of perceived breaches of the Code.

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 external service providers, which it uses to monitor ESG factors.

The achievement of the environmental or social characteristics promoted by the financial product is monitored and reported through the target companies’ carbon intensity trend and commitment to emission reduction targets, as well as through the number of target companies that have not committed serious norm violations.

Sustainability indicators are monitored through Evli’s internal ESG database. The data is based on data provided by external service providers, which is not verified by a third party. The completeness of the data is reported in conjunction with the sustainability indicators. All active investments of the fund promote environmental and social characteristics by observing Evli’s Principles for Responsible Investment and Climate Change Principles, and completeness of data has no impact on observance of the above-mentioned principles.

The fund’s benchmark index is a money market-based index that does not consider sustainability factors. The benchmark index used by the fund can be found in the fund-specific key investor information document.

b) No sustainable investment objective

This financial product promotes environmental or social characteristics, but does not have as its objective sustainable investment.

The fund promotes climate change mitigation by investing at least 2 percent of its total investments in activities that are environmentally sustainable economic activities under the EU Taxonomy Regulation (2020/852). For an economic activity to be environmentally sustainable under the Taxonomy Regulation, it must not cause significant harm to other environmental objectives. Environmentally sustainable investments are in line with the OECD Principles for Multinational Enterprises and the UN Global Compact and the UN Guiding Principles on Business and Human Rights. 

c) Environmental or social characteristics of the financial product

In addition to other characteristics, the fund promotes environmental and social characteristics by observing Evli’s Principles for Responsible Investment, Climate Change Principles and climate targets, and requires that target companies observe good governance practices. The fund excludes harmful industries on the basis of Evli’s responsibility principles and Climate Change Principles. In addition, target companies are regularly monitored for violations of norms.

The fund promotes climate change mitigation in accordance with Evli’s climate targets: 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 an interim target of a 50 percent reduction in indirect emissions from all investments by 2030, provided that this is possible in the investment environment. The comparison year is 2019. The fund-specific share of the emission reduction target may vary between funds.

Investment targets are monitored regularly, and efforts are made to engage with companies to influence their practices. Evli can engage with companies either independently or together with other investors. The themes of Evli’s engagement are climate change mitigation, respect for human rights, anti-corruption measures, taking environmental issues into consideration, factors related to good governance and the reporting of responsibility factors.

d) Investment strategy

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 external service providers, which it uses to monitor ESG factors.

The attainment of the climate targets will be measured using data from external service providers to monitor the fund’s carbon footprint and intensity, the degree of low-carbon transition, a scenario analysis in relation to the target of limiting global warming to 1.5 degrees Celsius and the warming ratio associated with the fund.

An assessment of the quality of corporate governance is an important part of the assessment of potential investments. Good governance refers in particular to effective management structures, employee relations, staff remuneration and tax compliance.

Evli’s ownership control principles state that the companies it invests in must 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 analyzes 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.

e) Proportions of investments

All active investments of the fund promote environmental and social characteristics.

Of the fund’s total investments, 2 percent are made in environmentally sustainable targets related to climate change mitigation in compliance with the EU’s Taxonomy Regulation.

f) Monitoring of environmental or social characteristics

The achievement of the environmental or social characteristics promoted by the financial product is monitored through the target companies’ carbon intensity trend and commitment to emission reduction targets, as well as through the number of target companies that have not committed serious norm violations. Evli has built an internal ESG database to monitor sustainability indicators. In addition, the Responsible Investment Team analyzes norm violation cases in accordance with the process set out in the Principles for Responsible Investment.

g) Methods concerning environmental or social characteristics

The environmental and social characteristics promoted by the financial product are monitored and reported using the sustainability indicators mentioned above.

h) Data sources and data processing

Evli has built an internal database based on data provided by external service providers, which is used for monitoring and reporting sustainability indicators and adverse impacts of investment decisions related to the promotion of the promoted environmental and social characteristics. The data from external providers is not verified by a third party and the completeness of the data is reported at the same time.

i) Limitations of methods and data

The achievement of the promoted environmental and social characteristics is reported annually through the sustainability indicators mentioned above, in conjunction with which the completeness of the data from the target companies is also reported. All active investments of the fund promote environmental and social characteristics by observing Evli’s Principles for Responsible Investment and Climate Change Principles. The completeness of the data does not affect compliance with the above principles.

j) Due diligence

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 external service providers, which it uses to monitor ESG factors. Evli regularly monitors its active investments and seeks to influence the companies’ practices. If a company violates the principles of the UN Global Compact, the UN Guiding Principles on Business and Human Rights, the OECD Guidelines for Multinational Enterprises or Evli’s Climate Change Principles, Evli will either seek to influence the company’s actions through engaging with it or exclude it from its investments. The methods are based on data provided by an external service provider, which is not verified by a third party.

k) Engagement policies

The financial product can be used to engage with the target companies as part of the promotion of environmental and social characteristics. Evli’s Responsible Investment Policy and Corporate Governance Principles set the framework for Evli’s engagement and conduct in the event of perceived breaches of the Code.

l) Designated reference value

The fund’s benchmark index is a money market-based index that does not consider sustainability factors. The benchmark index used by the fund can be found in the fund-specific key investor information document.

Read more about Evli's responsible investing

Information on environmental and social characteristics of the fund in accordance with article 8 of Sustainable Disclosure Regulation (in force from January 1, 2023)

Report on the promotion of the fund's environmental and social characteristics in 2022

Downloadable files

Invest

min. 1 000 €

Historical returns are no guarantee of future returns.

This page provides general product information and is a marketing communication. Historical returns are no guarantee of future returns. The value of an investment may rise and fall and the investor may lose some or all of the capital invested. The contents of this website should not be considered as investment advice and should not be relied upon in making an investment decision. Before making an investment decision, you should consult the fund's legal documents, such as the fund rules, the key investor document and the fund prospectus. The statutory documents and additional information of the funds are available on the product-specific pages and on www.evli.com/en/products-and-services/mutual-funds/funds/prospectus-presentations.