Stockholm (HedgeNordic) – Carnegie Credit Edge, an option-based high-yield credit hedge fund, officially merges into its larger sister fund, Carnegie Investment Grade, on October 24 after its final day as a standalone fund. Despite strong performance over the past two years, Carnegie Credit Edge’s assets under management remained relatively small, prompting Carnegie Fonder to merge it into a more traditional fixed-income fund under its umbrella.
The final net asset value was published at the close of business on October 23. “The fund’s option portfolio has been fully unwound, and its high-yield credit risk is now zero,” announces Emil Nordström, the portfolio manager responsible for the fund’s options strategy. On October 24, the fund officially merges into Carnegie Investment Grade.
Initially developed by hedge fund boutique Nordic Cross, Carnegie Credit Edge was designed to gain exposure to the European high-yield bond market through long-dated options. This approach allowed the fund to maintain significant cash reserves after paying options premiums, facilitating the creation of a liquid portfolio of highly rated bonds with low duration that enhanced yield potential. “It has been an incredibly interesting journey to launch what is likely the world’s first fully option-based, leveraged high-yield credit fund,” Nordström reflects on the fund’s journey. “I am grateful for the support and commitment we’ve received since its inception in 2018.”
“It has been an incredibly interesting journey to launch what is likely the world’s first fully option-based, leveraged high-yield credit fund.”
“I am also pleased to announce that we are closing the fund just a few basis points below its all-time high, with a year-to-date performance of seven percent,” Nordström adds. After a 14.7 percent decline in 2022, the fund rebounded with a 19 percent gain in 2023 and added another seven percent this year. Despite these solid results, the fund’s assets under management remained around or below SEK 50 million throughout most of 2024, eventually falling to the SEK 30 million level by the end of the summer.
“My journey “outside the box” is not over. It continues on the equity side of the market with the leveraged long-term savings fund, Carnegie Global Plus.”
The closure of Credit Edge marks the beginning of a new chapter for Emil Nordström. “My journey “outside the box” is not over. It continues on the equity side of the market with the leveraged long-term savings fund, Carnegie Global Plus,” he says. As lead portfolio manager, Nordström is now responsible for Carnegie Global Plus, a derivatives-driven equity fund that seeks to emulate the success of the AP7 Equity Fund (read more). The fund maintains 140 percent exposure to global equities via derivatives and tracks the MSCI World Climate Paris Aligned Index. Structured as a daily-traded UCITS fund, the fund maintains net market exposure between 135 and 145 percent on a daily basis.
