Evli, the Finnish institution management company with more than 8.1 billion of the managed assets, launched the Evli Nordic 2023 Target Maturity Fund, authorized for sale in France, Finland, Sweden, Germany, Spain and Italy.
Evly has 20 years of investment experience in the European and Scandinavian corporate bond market.
The fund, run by Jani Kurppa and Juhamatti Pukka, as well as AAA rated by Citywire, invests in high yield investment grade bonds as well as unrated corporate bonds. The Synthetic Risk and Return Indicator (SRRI) is the second level.
Evly's investment process is based on the demand for the best risk / return profile. The company uses an analytical approach based on individual cash flows, focusing on actual credit quality rather than on official ratings, and combining different segments of bonds wherever possible.
The ESG has long been established in Scandinavian markets and is fully integrated with the Evli Nordic 2023 Target Maturity Fund and all Evli credit analyzes. Indeed, many ESG issues directly concern the credit quality of the companies and therefore the solvency of the issuer. Evli also publishes a quarterly report on ESG for investors.
Reminder about Scandinavian corporate bonds
We recall that Nordic corporate bonds offer an attractive risk / return profile in an extremely stable political and economic environment. The Scandinavian corporate bond market consists of about 500 issuers and is worth about 225 billion euros, which is approximately the same size as the European high-income market. About 54% of the issuers and 29% of the volumes are unrated, representing respectively 262 issuers and 65 billion euro volume. The northern countries are home to one of the largest pools in Europe for unrated issuers.
Unoriented North Bonds offer a return of about 50 to 150 basis points higher than that of officially registered European corporate bonds, while at the same time representing a similar level of risk.
The majority of non-rated Nordic bonds are held by local institutional investors. Rather, they are "buy and hold" investors who buy and hold their securities, which creates very low levels of relative volatility in this market. That is why the distribution diversification effect, which includes corporate corporate bonds in North America, can improve the risk / return parameters in pan-European bond portfolios.