Nordea Asset Management expands
its European Covered Bond Family
LUXEMBOURG, LU — Nordea Asset Management (NAM) has recently launched the Nordea 1 – European Covered Bond Opportunities Fund (BP-EUR, LU1915690595 / BI-EUR, LU1915690835).
Building on the success of its European Covered Bond strategies, NAM has expanded its European Covered Bond strategy family with the new Nordea 1 – European Covered Bond Opportunities Fund (the “Fund”).
The Fund is designed for investors searching for compelling risk-adjusted returns in the fixed income space. With yields languishing at low levels and increasing signs of inflation pick-up, many assets once considered a reliable source of return – such as government bonds – are no longer attractive. European covered bonds, an underappreciated asset class, offer an interesting alternative to investors in search of “safe” yet higher yielding assets.
European covered bonds have a strong track record; they have not witnessed a default in over 200 years. “Covered bonds have a much lower volatility than credit bonds and government bonds,” says Henrik Stille, manager of the Fund. “They are very attractive if you want to reduce the volatility in a portfolio without losing expected return.”
The Fund’s predecessor, Nordea 1- Low Duration European Covered Bond Fund, has attracted market attention reaching more than €1 bn in AUM in under a year showing that the merits of this asset class are being recognized by investors. The new Fund keeps the same low interest rate risk as its predecessor, but expands the credit exposure using limited leverage.