Advertising Material for professional investors only*

Protecting capital through “rough waters”

18 November 2022

Many investors are having a tough year as financial markets experience one of the most challenging periods on record in recent decades. High inflation combined with Central Banks’ rate hikes to fight it are causing turmoil not just for investors but also for portfolio managers.

Why is that? To put it simply, assets classes are highly and positively correlated, meaning they react to the market in synch with each other. So in an overly hot market, mostly everything is sinking at the same time. With no place to hide, investors are becoming anxious because there seems to be no break in the spiral downward—and because nobody knows when the market will touch the floor.

As the old and well-known saying quotes “Sometimes the best way of winning is not having a good offense but a good defence”. For Nordea’s Multi-Asset Team, this is not just a saying, it is the investment philosophy they have been applying over more than 17 years in all their investment solutions. Indeed, this cautious investment philosophy has proven to pay off in the long run. While many investors and portfolio managers tend to focus on market noise and chase returns, our Multi-Asset Team prefers to put their hard work into understanding the main sources of risks at any point in time. For that reason, they build portfolios from a bottom-up perspective (not from a top-down view), while always maintaining a top-notch level of diversification. This becomes particularly valuable at times like now, when negative market events reveal portfolios’ real exposure towards risk.

Moreover, following this diversification approach towards risks can bring a higher level of protection in down markets while being able to participate in market upside. This translates into higher capital preservation features, which is something that investors are craving nowadays…

Nordea’s Multi-Asset Team manages Nordea’s Global Stable Equity Strategy, a long-only global equity portfolio with a historical tilt towards Value, Quality and Low Volatility. This strategy aims to outperform the market with an overall lower level of risk1. Here, the team selects stable companies with stable underlying fundamentals (e.g. earnings, dividends, etc.) that tend to result in less volatile share price performance. These companies typically have strong pricing power that enables them to pass on cost-inflation with minimal impact on margins1, a feature that is particularly beneficial in today’s uncertain and challenging environment. With an additional focus on valuation, the team avoids low quality and/or very expensive stocks. This investment approach enables the strategy to offer greater protection for investors during the equity sell-offs while still allowing them to participate in market upside.

The team has used its 17-year experience to fine-tune its well-established process and generate a strong track record that can give investors confidence as they consider the market challenges we are currently facing.

1There 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.
*according to MiFID definition

Nordea Asset Management is the functional name of the asset management business conducted by the legal entities Nordea Investment Funds S.A. and Nordea Investment Management AB (“the Legal Entities”) and their branches and subsidiaries. This document is advertising material and is intended to provide the reader with information on Nordea’s specific capabilities. This document (or any views or opinions expressed in this document) does not amount to an investment advice nor does it constitute a recommendation to invest in any financial product, investment structure or instrument, to enter into or unwind any transaction or to participate in any particular trading strategy. This document is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or instruments or to participate to any such trading strategy. Any such offering may be made only by an Offering Memorandum, or any similar contractual arrangement. Consequently, the information contained herein will be superseded in its entirety by such Offering Memorandum or contractual arrangement in its final form. Any investment decision should therefore only be based on the final legal documentation, without limitation and if applicable, Offering Memorandum, contractual arrangement, any relevant prospectus and the latest Key Investor Information Document (where applicable) relating to the investment. The appropriateness of an investment or strategy will depend on an investor’s full circumstances and objectives. Nordea Investment Management AB recommends that investors independently evaluate particular investments and strategies as well as encourages investors to seek the advice of independent financial advisors when deemed relevant by the investor. Any products, securities, instruments or strategies discussed in this document may not be suitable for all investors. This document contains information which has been taken from a number of sources. While the information herein is considered to be correct, no representation or warranty can be given on the ultimate accuracy or completeness of such information and investors may use further sources to form a well-informed investment decision. Prospective investors or counterparties should discuss with their professional tax, legal, accounting and other adviser(s) with regards to the potential effect of any investment that they may enter into, including the possible risks and benefits of such investment. Prospective investors or counterparties should also fully understand the potential investment and ascertain that they have made an independent assessment of the appropriateness of such potential investment, based solely on their own intentions and ambitions. Investments in derivative and foreign exchange related transactions may be subject to significant fluctuations which may affect the value of an investment. Investments in Emerging Markets involve a higher element of risk. The value of the investment can greatly fluctuate and cannot be ensured. Investments in equity and debt instruments issued by banks could bear the risk of being subject to the bail-in mechanism (meaning that equity and debt instruments could be written down in order to ensure that most unsecured creditors of an institution bear appropriate losses) as foreseen in EU Directive 2014/59/EU. Nordea Asset Management has decided to bear the cost for research, i.e. such cost is covered by existing fee arrangements (Management-/Administration-Fee). Published and created by the Legal Entities adherent to Nordea Asset Management. The Legal Entities are licensed and supervised by the Financial Supervisory Authority in Sweden and Luxembourg respectively. A summary of investor rights is available in English through the following link: The Legal Entities’ branches and subsidiaries are licensed as well as regulated by their local financial supervisory authority in their respective country of domiciliation. Source (unless otherwise stated): Nordea Investment Funds S.A. Unless otherwise stated, all views expressed are those of the Legal Entities adherent to Nordea Asset Management and any of the Legal Entities’ branches and subsidiaries. This document is furnished on a confidential basis and may not be reproduced or circulated without prior permission and must not be passed to private investors. This document contains information only intended for professional investors and eligible investors and is not intended for general publication. Reference to companies or other investments mentioned within this document should not be construed as a recommendation to the investor to buy or sell the same but is included for the purpose of illustration. The level of tax benefits and liabilities will depend on individual circumstances and may be subject to change in the future. © The Legal Entities adherent to Nordea Asset Management and any of the Legal Entities’ branches and/or subsidiaries.


Please note that we have updated our Privacy Policy. Click here to know more.