Evli Short Corporate Bond

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

NAV
21.10.2019
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
15.825 3.02 1.90 1.19 1.60 2.59
NAV
21.10.2019
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
29.570 3.02 1.90 1.19 1.60 2.59
NAV
21.10.2019
Return %
Year-To-Date
Return %
1 y
Return % p.a.
3 y
Return % p.a.
5 y
Return % p.a.
Since start
103.826 3.18 2.11 - - -

Risk

2/7

Morningstar

5/5

Recommended Investment Horizon

2 years or more

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.

Invest

min. 1 000 €

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

30.09.2019

No doubt the most anticipated event in September was an ECB meeting that was loaded with high expectations due to worsening macro economic data of late. ECB decision was multidimensional and generally speaking met the expectations by delivering 10 basis point cut in depo rate and introducing so called tiering system for central bank deposits. ECB also announced they are restarting their QE programme and more importantly guided it to last close to the point when they eventually start the rate hiking cycle – the event so far away many call it QE-infinity. The short end of the curve moved up by force as a result of tiering system and also longer end was moving higher. However, towards the end of month rates started their slide lower again. Corporate bond yield spreads were stable month-on-month but intra month especially high yield was volatile.

Fund total return for the month was -0.20%. The driver for negative return was rapid rise in short end rates. By sector the best performers were Leisure, Basic Industry and Transportation while Media, Services and Healthcare lagged the most. There was plenty of activity in the primary market in September but mostly in the long end of the investment grade market. We participated selectively in new issues and added new Cargotec 2025 and ThyssenKrupp 2023 bonds into the portfolio.

At the end of month fund yield to maturity was 1.27% and modified duration 2.07.

Fund facts

Type of fund Short-maturity corporate bond fund (UCITS)
Investment activity began 17.05.2004
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.

Downloadable files

Invest

min. 1 000 €