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Five-Year Milestone for Nordea’s Alpha 7

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Stockholm (HedgeNordic) – The youngest and most conservative member of Nordea Asset Management’s Alpha family, Alpha 7 Multi Asset Fund, is celebrating its five-year anniversary at the end of May. The Alpha family, which oversees €9.6 billion as of the end of April, consists of three solutions that share a common approach of capturing risk-on and risk-off risk premia but exhibit different risk-return profiles.

Launched in late May 2018, Nordea’s Alpha 7 MA Fund aims to deliver fixed-income-like returns with limited sensitivity to equity markets. The fund is the youngest and most conservative sibling within the Alpha family, managed by Nordea’s multi-asset investment team headed by Asbjørn Trolle Hansen (pictured). The entire fund range blends risk-on premia that perform well in rising markets with risk-off premia that perform well in falling markets, reducing reliance on top-down macro calls and offering attractive risk-adjusted results less dependent on equity market movements. Each of the three solutions has a distinct risk-return target to cater to different risk-return preferences.

“In order to achieve diversification, we balance both cyclical and anti-cyclical return drivers from a broad and diversified set of 20-30 risk premia spread across strategy types and asset classes.”

“In order to achieve diversification, we balance both cyclical and anti-cyclical return drivers from a broad and diversified set of 20-30 risk premia spread across strategy types and asset classes,” explains Hansen, who heads Nordea’s Multi Asset Team consisting of 40 professionals. The team manages around €150 billion in assets, with close to €10 billion for the three-member Alpha family. “This approach has repeatedly proved its worth to investors in difficult times – such as during the Covid-19 pandemic and the more recent early 2023 bank jitters.”

“Our intention when creating the Alpha range was to provide investment solutions that can have attractive returns with lower sensitivity to equity markets and limited downside risk,” says Christian Lehr, senior investment specialist for multi-assets at Nordea, during Nordea’s weekly webinar Nordea Talks. These solutions aim to provide risk-adjusted returns and diversification to traditional asset classes by using a diversified set of risk premia, including proprietary developed alternative risk premia, according to Lehr. “We want to give investors access to equity market upside, but also provide diversification for equity market risk using defensive alternative strategies with asymmetric return profiles.”

Over its five-year history, the Alpha 7 MA Fund has generated an annualized return of 2.9 percent over its five years, operating in a period of higher-than-usual market volatility. The fund with the lowest risk-return profile edged down 2.9 percent in 2022 after achieving gains of 6.3 percent in 2021, 4.7 percent in 2020, and 4.9 percent in 2019, respectively. The fund is up 2.4 percent in the first four months of 2023. The longest-living member of the Alpha family, Alpha 10 MA Fund, which manages €4.6 billion, delivered an annualized return of 3.1 percent since late 2009. The €4.5 billion Alpha 15 MA Fund, which exhibits the highest risk-return profile in the family, has achieved an annualized return of 6.4 percent since its inception in mid-2011.

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Eugeniu Guzun
Eugeniu Guzun
Eugeniu Guzun serves as a data analyst responsible for maintaining and gatekeeping the Nordic Hedge Index, and as a journalist covering the Nordic hedge fund industry for HedgeNordic. Eugeniu completed his Master’s degree at the Stockholm School of Economics in 2018. Write to Eugeniu Guzun at eugene@hedgenordic.com

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