Fixed income funds

Fixed income funds invest their assets in fixed income instruments, such as money market investments. Their return is determined by the performance of the fixed income and credit risk markets. Regular coupons are paid on fixed income investments, which makes it easier to forecast their expected return. 

Find examples of our fixed income funds below. You can learn more about each fund in Nordea Mobile or Netbank by clicking on the fund’s name. You can also find our full fund selection in our Funds Now service.

Fixed income investments usually generate a good return when share prices are falling, and vice versa. By investing in both equities and fixed income funds, for example, you can balance the risk in your investment portfolio. Fixed income funds diversify their bond investments across different maturities, regions and issuers.

The issuers include governments, private companies, financial institutions, municipalities and other public-sector entities. You can read more about how a fund selects its investments in the fund’s key investor information document and rules.

Fixed income funds are typically divided into a few categories.

Short-term fixed income funds

Short-term fixed income funds (also known as money market funds) hold instruments with an average maturity of a maximum of one year. They invest in bonds issued by banks, private companies, governments and municipalities as well as in other fixed income instruments. Nordea Moderate Yield Fund is an example of a short-term fixed income fund.

Long-term fixed income funds

Long-term fixed income funds invest in instruments that mostly have an average maturity of more than one year. They may invest in government bonds, corporate bonds or both. Nordea Euro Bond Fund, which invests in government bonds, and Nordea Corporate Bond, which invests in corporate bonds, are examples of long-term fixed income funds.

Corporate bond funds

Corporate bond funds are typically divided into two classes:

• Investment grade corporate bond funds. These invest in bonds issued by companies with a high credit rating, which is also called an ‘investment grade rating’. In these funds, the most significant risk is the interest rate risk, as the maturities of corporate bonds are typically long. Nordea Corporate Bond Fund is an example of an investment grade corporate bond fund.
• High yield corporate bond funds. These invest in bonds issued by companies with a low credit rating (also called a ‘high yield rating’) and high leverage ratio. They are characterised by higher risk and expected return. The main risk in these funds is the companies’ credit risk, which means the risk that a company fails to repay its debts. The total risk related to high yield bonds is lower than the risk related to investment grade bonds, as the bonds issued by high yield companies usually have shorter maturities than the bonds issued by investment grade companies. International High Yield Bond HB is an example of this type of fund.

The information provided on this website is intended as general product information only and does not constitute investment advice or recommendations. When it comes to funds or equities, past performance is not a guarantee of future results. The value of fund units or equities may increase or decrease due to market movements, and it is not certain that you will get back the entire amount you invested.