Nordea Abandons Hunt for Trends

Stockholm (HedgeNordic) – Trend-follower Nordea 1 – Heracles Long/Short MI Fund is set to merge with one of the three alpha products managed by Nordea’s multi-asset team before midsummer in June. The merging fund has experienced a steady decline in assets under management in recent years, with the board of directors of Nordea’s Luxembourg-based investment company deciding to merge the fund because of “limited prospects for growth.”

Christoph Sporer (pictured), a fund manager at Metzler Asset Management, has been managing Nordea 1 – Heracles Long/Short Fund (Heracles) on a mandate employing the same strategy the fund used since its inception in 2008. Heracles uses rule-based derivatives strategies to take long and short positions in liquid index futures, bond futures and currency forwards, seeking to capture three- to 12-month market trends.

The fund has struggled to generate returns in recent years due to the lack of long-lasting trends in equity markets, yields, and currencies. Last year, Heracles was the third-worst performing member of the NHX CTA after losing 18.3 percent. The fund’s share class reflected in the Nordic Hedge Index delivered a negative cumulative return of 6.6 percent since launching in late 2008. Following a prolonged period of lackluster performance, Heracles has seen its assets under management decline to 36.9 million at the end of April this year.

Heracles will be merged into Nordea 1 – Alpha 15 MA Fund, a member of the Nordic Hedge Index that employs a multi-asset approach to harvest different risk premia. The fund employs a Nordea in-house multi-asset strategy that has proven successful both in terms of performance and asset gathering. Nordea 1 – Alpha 15 MA Fund gained 8 percent in the first four months of 2019 and managed €1.3 billion at the end of April. The fund has delivered an annualized return of 4.3 percent since launching in November of 2006.

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About Author

Eugeniu Guzun serves as a data analyst responsible for maintaining and gatekeeping the Nordic Hedge Index (NHX), as well as being a novice columnist covering the Nordic hedge fund industry for HedgeNordic. Prior to joining HedgeNordic, Eugeniu had served as a columnist for a U.S. journal covering insider trading activity, activist campaigns and hedge fund moves. Eugeniu completed his Master’s degree at the Stockholm School of Economics in 2018.

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