So, all of those seem to be investing in corporate bonds. Not necessarily a bad thing, but it just caught my eye, as government bonds are the larger part of the bond market.
Perhaps they have expertise in that area.
Why not ask for a third quote as well! Danish Accunia is an interesting option. Through them, you can also get involved in CLO investments. Service is also available in Finnish and Swedish.
I will try to ask for offers from all three. Could you still tell me what all things are important to ask? Iâm just wondering if there are any hidden costs or other ârisksâ that sellers donât disclose if the inquirer doesnât know what to ask.
And thatâs why Iâm asking about these bonds again, as thereâs a lot of general talk about diversification, so that people donât have all their eggs in stocks. I have long invested in a global index through an ETF, and since my investment horizon is at least 15-20 years, does it even make sense to invest in bonds for diversification? So am I just overthinking and fretting about bonds solely because people generally talk about diversification?
Eight years have passed for me with the global index without any headaches or major worries.
I would at least find out the YTM (Yield to Maturity) and duration for all bond funds. Many funds are completely silent about these and only show return percentages, even though YTM and duration are perhaps the most essential factors for future returns. Evli usually has all these figures in their online brochures, but some asset managers hide these figures for some reason. At worst, people have unknowingly kept their money in a bond fund where the YTM has been lower than the management fee â meaning, in practice, the fund theoretically couldnât even make any profit if interest rates remained the same. Duration, on the other hand, affects how strongly the value of funds moves if interest rates change up or down. I recommend reading these blog articles on the topic:
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100% osakesalkkua puoltavaa tutkimustakin löytyy, joten ei korkoja vÀkisin tarvi salkkuun tunkea. TÀssÀ valmiiksi pureskeltu video aiheesta.
Perinteisen 60/40 salkun korko-osuus sisÀltÀÀ goverment bondeja tai aggregate bondeja, jotka sijoittavat laajemmin korkomarkkinaan. Yrityslainoissa(etenkin high yield) on iso korrelaatio-osakemarkkinaan ja niiden hajautushyöty osakkeisiin nÀhden jÀÀ pieneksi, joten nÀitÀ ei kÀsittÀÀkseni perinteisessÀ risk parity strategiassa hyödynnetÀ muuta kuin osana aggregate bond tuotteita, joissa on mukana jonkin verran korkean luottoluokituksen yrityslainoja.
Suomessa hommaa hankaloittaa se, ettÀ rebalansointi ei ole verotehokasta, joten yhdistelmÀrahaston kaltaiset tuotteet ovat huokuttelevia, mikÀli tarkoituksena on tehdÀ pitkÀaikainen sijoitus, eikÀ vain löytÀÀ paikka sÀilyttÀÀ kÀteistÀ lyhyen aikaa. ETF maailmasta kannattaa vilkaista NTSG, joka on globaali 60/40 1,5 vivulla.
Jos olet sijoittanut vain maailma indeksiin, niin ensimmÀisenÀ hajautuskohteena suosittelisin kehittyville markkinoille hajauttamista.
Sitten jos kunnolla haluaa mennÀ syvÀÀn pÀÀtyyn, niin nykyÀÀn löytyy jo eurooppalaisillekin alternative investment tuotteita, joilla voi hakea lisÀhajautusta osakkeiden ja bondien lisÀksi.
Yhteenveto
The following wiki post tries to collect alternative investment funds available to UCITS investors. Some remarks for future readers/editors: The table only lists the cheapest share class available to individual investors (empirically, not necessarily according to the prospectus). The AuM always refers to the entire fund. For ISIN reference use the links in the Refer column. The ticker symbol refers to the equivalent US fund institutional class, because this is the ticker typically used in existing topics.
Managed Futures (SG CTA Index)
Ticker Refer Name Class Min TER PF Brokers AuM strategy DBMF $ iMGP DBi Managed Futures R / ETF 1.09% / 0.75% All 100 replicates the SG CTA Index Trend (SG CTA Trend Index)
Ticker Refer Name Class Min TER PF Brokers AuM strategy ASFYX $ ⏠Virtus GF AlphaSimplex Managed Futures R 5k 1.35% IB 306 PQTIX $ ⏠PIMCO TRENDS Managed Futures Strategy I 1.40% CD, IB 224 short term, low vol AHLIX $ ⏠Man AHL Trend Alternative DNY (H) 15k 1.50% 20% All 890 AQMIX $ ⏠AQR Managed Futures A/B 100k 0.79% 10% SB+ 483 Winton Winton Trend-Enhanced Global Equity USD I, EUR I 50k 1.1% 100% MSCI World + 100% Winton Trend $ ⏠Winton Trend I 50kÂč 1.06% DAB, Fidelity(USD, no min.) 899 $ ⏠MontLake DUNN WMA Institutional Retail Pooled 1k 1.36% 25% CD 504 11.5% target vol MontLake DUNN WMA Institutional Institutional A Pooled n.a. 0.1% 25% Fidelity 504 11.5% target vol $ ⏠Schroder GAIA - BlueTrend C 10k 1.44% 10% DAB, IB 312 $ ⏠Quantica Managed Futures I1C-U/E 10k⎠0.95% 20% CDÂł, IBÂČ 124 $ ⏠MontLake Crabel Advanced Trend Institutional 1mÂč 1.00% DAB, CDÂł, Fidelity (USD, no min.) 143 Âč EUR-hedged version available at DAB without minimum
ÂČ EUR-hedged version only
Âł USD version only
⎠USD version available at comdirect without minimumTrend EUR
Ticker Refer Name Class Min TER PF Brokers AuM Strategy FI FS Amundi Metori Epsilon Global Trends I 500kÂč 1.12% 15% DAB, CD, IBÂČ 419 FI FS Candriam Diversified Futures C 1.70% 20% DAB, CD 247 12% target vol FI FS UI ADR Managed Futures SI 1.00% 15% DAB, CD 11 Âč EUR version available at DAB without minimum
ÂČ A class with 10k minimum onlyCommodity Carry
Ticker Refer Name Class Min TER PF Brokers AuM strategy UEQC $ ⏠UBS CMCI Commodity Carry SF 0.34% All 157M 2.5x leveraged long CMCI, short BCOM UBF6 UBS CMCI Commodity Carry Ex-Agriculture SF 0.34% All 65M Alternative Risk Premia (L/S Multi-Asset Factors)
Ticker Refer Name Class Min TER PF Brokers AuM strategy FI FS AQR Style Premia A/B REU/RAU 100K 10K 0.79% 0.89% 10% SB+ IBKR 404 QSPIX-like, without commodities, ESG FI FS Man Alternative Style Risk Premia D 1k 1.75% IB 400 FI FS BSF Systematic Style Factor A2 5k 1.10% (5% entry fee) IB 161 L/S Equity Factors
Ticker Refer Name Class Min TER PF Brokers AuM strategy QMNIX FI FS AQR Adaptive Equity Market Neutral RAU 10k 1.00% 15% 265 FI FS Schroder GAIA Two Sigma Diversified C 10k 1.40% 20% IB 366 85% US Equity Market Neutral + 15% Global Macro Risk Parity (Blended Stocks/Bonds)
Ticker Refer Name Class Min TER PF Brokers AuM strategy NTSX JE EE WisdomTree US Efficient Core Fund 0.20% All 12 1.5x levered 60/40 US large cap equity & treasuries AQRIX FI FS AQR Global Risk Parity RAUF 10k 0.60% 869 NTSG WisdomTree Global Efficient Core 0.25% All 1.5x 60/40 global developed large cap equities & global gov bonds (US, DE, JP, UK) Total Return (Blended Stocks/Bonds + Alts)
Ticker Refer Name Class Min TER PF Brokers AuM strategy FI FS AQR Apex / Systematic Total Return IAUFT 100k 1.85% 20% IB 536 Leveraged combination of different AQR strategies ESG QLEIX(?) FI FS AQR SUSTAINABLE DELPHI IAUFT 100k 1.67% IB 524 0.5xGlobal Equity+L/S equity ESG QLEIX(?) FI FS AQR SUSTAINABLE DELPHI IAUT 100k 0.87% 15% IB 524 0.5xGlobal Equity+L/S equity FT FS Campbell Absolute Return B 10K 1.48%? 15% IB 143 Multistrategy: trend, global macro (incl. multi-asset carry), short-term trading, equity L/S Catastrophe bonds (CAT bonds)
Ticker Refer Name Class Min TER PF Load/Exit Brokers AuM Liquidity Expected Loss at issuance VaR 99% TVaR 99% Excess spread strategy/notes R EUR: LI0290349617 Plenum Plenum Cat Bond Defensive R 1 share or 100 eur 1.72% 0 0 SB+, Swissquote $401M Weekly 1.5% 19.4% 23.4% 2.6% 2024.10.31 MM + 3 to 4% R EUR: LI1115702824 Plenum Plenum Cat Bond Dynamic R 100k⏠1.72% 0 0 CD, SB+ $181M weekly 2.4% 30.3% 34.2% 4.7%, 2024.10.31 Target: MM + 8% / year P EUR H: IE00BD2B9710 Twelve Twelve Cat Bond B / P 10k / 25k 1.7% / 1.3% 0 0 $3.1B weekly 2.1% 28.2% 34.1% 5.3%, 2024.10.31 R USD: LU2586007978 Twelve Twelve Peak Peril R (USD only) 125k 1.7% 0 0 $149M quarterly 3.7% 52% 59% 7.8%, 2024.09.30 60% public cat bonds / 30% private ILS / 10% cash Twelve Twelve Alliance Dynamic ILS B 10k 1.55% 0 0 $198M weekly 2.2% 27.6% 34.1% 6.0%, 2024.10.31 70% public cat bonds / 30% world aggregate bonds, duration 1.5y R EUR: IE00BF5GGB04 GAM GAM Star Cat Bond R (EUR only) or Ord (higher fee) 10k 1.07% 10% 0 DAB, IB, SB+ âŹ2.2B 2x/month 2.1% 8.2 - 2.1 = 6.1%, 2024.09.30 F EUR H: IE00BZCPNH50 F USD: IE00BJXFRC58 Axa AXA IM WAVe Cat Bonds F / F hedged 25k 0.97% / 0.99% 0 3%/3% CD, SB+ $235M 2x/month 2.2% 25.4% 6.4 - 2.2 = 4.2%, 2024.10.31 USD: LI0049587293 EUR H: LI0049587301 Solidum Solidum Cat Bond R (USD base currency or EUR/CHF hedged) 10 shares (~19k 11.2024) 1% 0 0 DAB, SB+ 2x/month Low vol? USD: LU2049315265 EUR H: LU2123043015 Schroder Schroder GAIA Cat Bond C / C hedged 100k 1.38% / 1.4% 0 1%/0% DAB $1.8B 2x/month 3.2% 25.4% 29.0% 10.8 yield - 4.81 SOFR - 3.2 EL = 2.8%, 2024.10.31 USD: LU2643719615 Franklin Templeton Franklin Templeton K2 Cat Bond W (USD only) $1000 1.11% 0 0 $140M 2x/month 1.6% 22.1% 6.1 - 1.6 = 5.5%, 2024.09.30 USD: IE00BJ0LQT69 EUR hedged: IE00BL4KHY58 EUR unhedged: IE00BL4KHM37 Securis Securis Catastrophe Bond D / D hedged 100k 1.05% 0 0 $293M 2x/month 1.5% 10.8 - 5.35 SOFR - 1.5 EL = 4.0% 2024.08.31 Target RF + 4-5% swissfunddata Credit Suisse Cat Bond 1.52/1.59? swissfunddata JSS Cat Bond 1.09/1.84? not listed on official website. Twelve Capital Cat Bond Fund has an I-JSS share class, is this rebadging it? swissfunddata LGT Cat Bond 1.31/1.81? fundinfo LGT Dynamic Cat Bond most likely institutional only, mainly in AUD? Tailor made for one AUS Investor? Excess spread: the discount margin minus expected loss at issuance. This should be the expected return (likely before fees and trading costs, TBC).
Discount margin: the insurance premium, i.e. the return above the risk-free rate that is earned by collateral.
ItsellĂ€ni on hieman hĂ€mĂ€rĂ€n peitossa, mikĂ€ on tĂ€mĂ€n hetkisen tutkimuksen mukaan se âteoreettisesti oikea tapaâ sijoittaa, jos lĂ€hdetÀÀn osakemarkkinan ulkopuolelle seikkailemaan.
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Adding fixed income certainly improves diversification in the sense that the return-to-risk ratio is better. But the portfolioâs return also decreases because the expected return of fixed income is lower. So in practice, if one wants as high a return as with stocks, the portfolio must be leveraged. But on the other hand, by leveraging the portfolio to about the volatility level of stocks, one gets a slightly better return compared to stocks because the return-risk ratio is better.
This is at least the simplified version; the cost of debt and taxation also have an impact.
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In Scott Cederburgâs studies, bonds performed surprisingly poorly, and 100% stocks surprisingly yielded a better outcome than leveraged 60/40. According to Cederburg, the traditional strategy aiming for Sharpe maximization does not account for the skewness and kurtosis of real-world long-term return distributions, so they donât tell the whole truth. The podcast should start at approximately the right point.
https://youtu.be/iH4f-J6TZsg?si=ETlxoH4BE2-NXCwf&t=4664
Bonds only entered the optimal portfolio when the cost of leverage was very low and there was a lot of leverage available.
A good and carefully conducted study, but of course just one among many. And I donât recall if itâs even finished and peer-reviewed yet. It was at least a working paper initially when it started gaining attention.
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Could be, Iâll have to listen to that. This paper by Cliff Asness always comes to mind regarding this, which is old, of course.
60/40 also actually still has a lot of equity risk in terms of risk; many optimizers would probably put even more bonds and other asset classes depending on assumptions and increase leverage. But I myself donât like low-return asset classes being leveraged excessively; I think it goes into over-optimization.
But itâs also hard to see how a portfolio with a clearly better Sharpe ratio and lower drawdowns than equities wouldnât perform better when leveraged, if real-world problems are not considered, which are, of course, a very relevant topic of their own. Mathematically, it should work 
This is now a bit off-topic from interest rates. In interest rates, government bonds work best as a diversifier. High yield, on the other hand, already correlates quite strongly with equities, meaning the diversification benefit decreases.
And ultimately, I think the best portfolio for oneself is the one you can live with and stick to the strategy, not necessarily the most optimal one on paper.
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The Sharpe ratio assumes the return distribution is normally distributed. This is not actually the case in the long run; instead, the distribution has skewness, and apparently also excessive kurtosis causes a deviation from the theoretical situation. The long-term correlation between stocks and bonds is also much greater than when examined over a short time horizon.
That research causes a lot of resistance. There are many gel-haired individuals whose livelihood would diminish if such research became a consensus, and it would certainly be a tough pill for many professionals to swallow to admit having spread incorrect information for decades. 
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Evli reported the YTMs and durations of those bond funds. Should anything else be clarified?
And I also talked to Mandatum. I mentioned that I might test interest rates with a few thousand euros. Now I received an offer, with Mandatum Nordic High Yield Total Return Fund as the investment target. And what on earth, the offer included an insurance contract for an investment-linked insurance policy? What on earth was such a thing crammed (or attempted to be crammed) in there? I donât really understand what this is even about, can you help?
Mandatum includes investment insurance for all its private customers. At no extra cost. This is a significant advantage. If you wish to change the investment target at some point, you will not have to pay tax on it. Compound interest. Compound interest.
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Thanks Kryptoniitti for the answer. And what do you think, should I test that Mandatum Nordic High Yield Total Return Fund? So, is it such that the fund is okay, even if the fees are 1%?
And so, does Evli not automatically come with such a corresponding investment insurance? So, should one know immediately where to invest and in which investments one intends to stay?
And the differences between investment insurance and a savings agreement. Itâs not really clear to me which one of these I should choose?
Sijoitusvakuutus tai sÀÀstösopimus - valitse joustava tapa sijoittaa - Mandatum
That fund has historically performed very well and has been awarded as the best high yield fund. We donât know about future success, but of course, the same team continues to manage the fund. The fees are high, but on the other hand, they also cover the costs of the investment insurance. A viable option.
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Investment-linked insurance includes life insurance. If you happen to pass away before withdrawing the funds yourself, the beneficiaries specified in the agreement will receive the funds immediately (as an insurance payout) before inheritance distribution, and if they are close relatives, with a lower inheritance tax percentage.
A savings agreement does not include life insurance. In this case, upon death, the assets of the agreement transfer to the estate as they are, and the agreement remains in force until the estate withdraws the funds from the agreement. And the distribution of assets proceeds in the normal manner through inheritance distribution, like other assets of the estate.
Which one should you choose? It depends entirely on your own situation.
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That is the main difference between them. Of course, itâs advisable to scrutinize the more detailed terms of the products regarding costs, investment selection, and other conditions.
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Can someone explain what happens in a situation where an asset management company managing a bond fund goes bankrupt? Are oneâs own investments protected then, and are they liquidated into money for investors? Surely the companyâs creditors cannot access investment assets owned by private individuals? So Iâm considering investing in the Evli Liqvidi B bond fund. Surely no deposit protection covers such a situation because itâs not a deposit account.
Evli is unlikely to go bankrupt. However, if an asset manager does go bankrupt, the listed securities are salable at market price. There is no deposit guarantee, and there should be no cause for concern, unless the fund has invested in the debt securities of the same house.
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Unlikely, of course, that this would happen, but itâs certainly something to consider before investing.
Investorsâ money is separate from the fund companyâs money. In the event of bankruptcy, the funds would likely be transferred (i.e., someone would acquire this business) to be managed by someone else, and investments would probably not even need to be dumped on the market because of this.
The deposit guarantee fund does not cover this because it is not an account.
Evli Likvidi B is, in my opinion, a perfectly sensible parking spot for money. Its risk is slightly higher than Seligsonâs Money Market Fund, but still on the more moderate side.
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Fund assets are held by the custodian, always separate from the own assets of both the fund management company and the custodian (i.e., some bank; who this is for each fund can always be found in the fundâs Key Investor Information Document). For example, in Nordnetâs funds, custody is with SEB; traditional banksâ fund management companies likely have it in-house.
In other words, the bankruptcy of a fund management company does not have a (direct) impact on the fund. Of course, it would certainly affect portfolio management and thus have an indirect impact, but the fundâs assets themselves are safe.
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