Arctics Fixed Income Team wins Morningstar Awards for Best Fixed Income House Norway for the second year in a row
- A common factor for our fixed income management is a thorough analysis of both macroeconomics and credit quality among issuers in the Nordic fixed income market, says CEO Lisbeth Gyland.
Strong risk-adjusted returns have been achieved through good teamwork in the interface analysis and portfolio management, as well as patience in risk-taking, where the portfolios are adjusted according to how well we are paid for the risk. Our fixed income team and investment process have once again received recognition in the form of the Morningstar Awards Best Fixed Income House Norway for the second year in a row.
The award is based on all Arctic fixed income funds' risk-adjusted returns over five years. According to Morningstar, it is mainly Arctic Return that can point to a very strong risk-adjusted return over the last 5 years (2016-2020), but Arctic High Return has also performed well.
- We are positioned for a stronger rise in interest rates than what is priced in the market today and have a short fixed interest rate in all our portfolios. An increase in interest rates from Norges Bank will therefore be positive for the portfolios in that it provides an increased current return without any specific mark-to-markey loss. Our fixed income funds are also positioned for a spread increase in long-term bonds, especially in the safest part of the credit market (investment grade). "Due to the central banks' massive purchases of precisely this type of bond, these are now priced at historically low levels. Bond issuers are taking advantage of this cheap borrowing possibility by issuing ever longer bonds and maturities of between seven and ten years have now become common. In our view, we are not compensated enough for the risk these long bonds can provide ", says Gyland. - We therefore choose not to buy these long bonds and find better value in the shorter part of the credit curve.