Nordea Asset Management has expanded its suite of strategies with the launch of the Nordea 1 - European covered bond opportunities fund.
European covered bonds, often an under-appreciated asset class, offer an interesting alternative to investors in search of ‘safe' yet higher yielding assets.
The new strategy is designed for investors searching for compelling risk-adjusted returns in the fixed income space. European covered bonds have a strong track record, with the asset class witnessing no defaults in more than 200 years.
Henrik Stille, manager of the fundsaid: "Covered bonds have a much lower volatility than credit bonds and government bonds. They are very attractive if you want to reduce the volatility in a portfolio without losing expected return."
The new European covered bond opportunities fund keeps the same low interest rate risk as its predecessor, but expands the credit exposure using limited leverage.