European Covered Bond Funds | Nordea Asset Management

Stay covered.

Whether you are taking your first steps into investing or are a more seasoned investor, Covered Bonds could be your answer. This asset class is characterised by strong protection and attractive returns. Our range of covered bond strategies benefits from these characteristics while offering you different risk levels tailored to your needs.

Stay covered with Nordea’s Covered Bond solutions.

Safety first for your lower risk investments
Put your money to work in today’s low-yield environment
Alpha generation from an experienced team with a strong record

Why covered bonds? For protection.

Top ranking bonds

If the issuer (a bank or mortgage institution) becomes bankrupt, the covered bonds are the last to lose

Supported by a double level of protection (dual recourse)

Backed by the issuing institution
Backed by a “cover pool” of highly regulated assets that will cover the bond’s payments if the issuer can’t.

No covered bond has ever defaulted in more than 200 years.

Three covered bond solutions to meet your various risk requirements

Source: Nordea Investment Funds S.A. Period under consideration: 30.01.2012 – 30.06.20. Performance calculated NAV to NAV (net of fees and Luxembourg taxes) in the currency of the respective share class, gross income and dividends reinvested, excluding initial and exit charges as per 30.09.2020. Initial and exit charges could affect the value of the performance. The performance represented is historical; past performance is not a reliable indicator of future results and investors may not recover the full amount invested. The value of shares can greatly fluctuate as a result of the sub-fund’s investment policy and cannot be ensured, you could lose some or all of your invested money. If the currency of the respective share differs from the currency of the country where the investor resides the represented performance might vary due to currency fluctuations.

All three European Covered Bond funds follow the same investment strategy and are managed by the same experienced team. The 1.3% alpha generation potential represents historical performance of the European Covered Bond Strategy, which is representative of the potential value added for all three funds and has the longest track record. The funds differ in their risk levels – spread and interest-rate risk. The doubling of the credit risk exposure in the Nordea 1 – European Covered Bond Opportunities Fund potentially increases the alpha opportunity.

There can be no warranty that an investment objective, targeted returns and results of an investment structure is achieved. The value of your investment can go up and down, and you could lose some or all of your invested money. For illustrative purpose only.

* Average outperformance of the Nordea 1 – European Covered Bond Fund BP-EUR over the Iboxx EUR Covered Bond Index, calendar year basis. Source: Nordea Investment Funds S.A. 30.01.2012–31.12.2019. The performance represented is historical; past performance is not a reliable indicator of future results and investors may not recover the full amount invested. The value of shares can greatly fluctuate as a result of the sub-fund’s investment policy and cannot be ensured, you could lose some or all of your invested money

Experienced Team of Portfolio Managers

20 years average experience
10 years average working together
Manages over EUR 40bn in this highly liquid market
With a strong track record of outperformance*

*Past performance is not a reliable indicator of future results and investors may not recover the full amount invested. The value of your investment can go up and down, and you could lose some or all of your invested money.

Glossary

Covered Bonds: top ranking corporate bonds with a double layer of protection
Spread Risk: the risk/opportunity arising from the additional bond yield over the risk free rate related to the risk of the issue
Interest rate risk: the sensitivity of a bond or a fund to interest rates, which drive bond prices down when rates go up
Duration hedge: reducing the exposure to interest rate risk, thereby making the fund’s performance less volatile

Danish Fixed Income & Euro Covered Bond Team

Henrik Stille

Portfolio Manager

Multimedia

Nordea 1 - Low Duration European Covered Bond Fund

Safety first: European Covered Bonds

Fund documentation

Covered Bonds

Fund Portrait Fund Update Special Edition In Focus Special Edition