Evli celebrates the 20th anniversary of Evli Corporate Bond, a fund managed since 1999 by Mikael Lundström.
This strategy aims to achieve a high-risk adjusted return over a broad investment universe, combining European Investment Grade, European High Yield and Nordic unrated bonds.
Mikael Lundström, now Chief Investment Officer at Evli Fund Management Company Ltd, has been managing the Evli Corporate Bond fund since 1999 and was joined in 2014 by Jani Kurppa, Senior Portfolio Manager.
"We launched this strategy immediately after the birth of the euro, but we are still maintaining the same investment philosophy," explains Mikael Lundström. "When constructing a portfolio, we seek to pick bonds with best risk adjusted total return potential by assessing true credit quality contrary to just considering official ratings. It is this approach, that has enabled us to achieve an excellent track record with performances of around 5 percent per year* since the launch of this strategy”.
In terms of portfolio construction, the Evli Corporate Bond fund has a maximum of 20 percent unrated bonds and an average rating of BBB-. Managers can also actively alter the duration to be more flexible.
“Credit in the BBB and BB ratings, i.e. crossover credit, is in an attractive position between safe assets with low-yield, such as Investment Grade A-AAA, and riskier High Yield rated B. In addition, unrated Nordic bonds provide a very interesting diversification, since the correlation is low with European Investment Grade and High Yield", says Mikael Lundström.
ESG is also actively integrated in the investment process and bond selection. The portfolio managers make their investment decisions, in cooperation with the ESG team and the RI Steering Group, based on quantifiable credit quality risks and ESG issues. Also taking into account both companies and sectors excluded from Evli’s investment universe, as well as ESG scores, Evli’s Climate Change Principles and the Principles of the UN Global Compact.
*Past performance is no guarantee of future returns.
Fund technical characteristics:
Evli Corporate Bond
Fund type: UCITS
ISIN A/B/IB: FI0008801089/FI0008801097/ FI4000243217
Benchmark: 75% ICE BofAML EMU Corporate Index (ER00) / 25% ICE BofAML Euro High Yield, BB-B Constrained Index (HEC4)
Fees: 0.85% p.a. (A, B) / 0.45% p.a. (IB)
Read more at evli.com/ecb20
For more information, please contact:
Mikael Lundström, Chief Investment Officer, Evli Fund Management Company Ltd, tel. +358 9 4766 9321, mikael.lundstrom@evli.com
