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Nordea Unveils Fund Targeting Equity Returns with Risk Mitigation

Report: Private Markets

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Stockholm (HedgeNordic) – Nordea Asset Management’s Multi-Asset team has introduced a new fund designed to achieve equity-like returns while minimizing sensitivity to equity market sell-offs. The Nordea 1 – Diversified Growth Fund adopts a net-long, multi-asset growth strategy that seeks to deliver returns similar to equities, but with relatively lower volatility, creating a positive asymmetric return profile.

“Investors must rethink their portfolio construction strategies,” says Claus Vorm (pictured), co-portfolio manager of Nordea 1 – Diversified Growth Fund. “Investors who are focused on achieving equity-like returns, but also concerned about the risks, will find that our Diversified Growth Fund offers a compelling alternative that seeks to maximize returns while managing volatility,” adds Vorm, who is part of Nordea’s multi-asset investment team headed by Asbjørn Trolle Hansen. “We believe investors can expect a positive asymmetric return profile.”

“Investors must rethink their portfolio construction strategies.”

Claus Vorm, co-portfolio manager of Nordea 1 – Diversified Growth Fund.

The Diversified Growth Fund is managed by Nordea’s Multi-Asset team, which also oversees the Alpha family of funds – a trio of hedge fund solutions with varying risk-return profiles that share a common approach of capturing risk-on and risk-off risk premia. The Alpha family manages €6.8 billion as of September-end this year. However, the newly launched Diversified Growth Fund departs from the more traditional defensive multi-asset strategies that have performed well in a low-rate, low-inflation environment. Instead, the strategy embraces a net-long, multi-asset growth approach aimed at delivering equity-like returns with lower volatility. 

The strategy combines both aggressive and defensive assets, with a pronounced tilt towards growth-oriented investments – such as high-quality equities. This balance allows the fund to maintain exposure to growth assets while incorporating defensive measures, such as high-quality government bonds and quantitative strategies, to provide protection during market downturns. The Nordea 1 – Diversified Growth Fund seeks to deliver equity-like returns, targeting a cash return plus seven percent, while mitigating sensitivity to equity market sell-offs.

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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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