Nomura Real Protect Fonds

Nomura Global Inflation-Linked Bonds (ILBs) 

Nomura’s global ILB strategies actively position our clients’ portfolios across the global ILB spectrum, being able to profit from the diverging inflation cycles across countries, delivering protection against unexpected inflation increases, whilst seeking the most attractive risk / reward dynamics and hedging currency risks where they are unrewarded. With a strong track record since 2004, Nomura is one of the most established managers of global ILBs.  

Investment Strategy

The Nomura Real Protect Fonds is based on our Nomura ILB Short/Medium Maturities strategy. The Short/Medium Maturities strategy focuses on achieving real returns while minimizing volatility. Investing predominantly in the 1 to 5 year maturity range, its universe also includes longer maturities, as well as in nominal bonds and futures to achieve the investment objective. Active returns are generated by global real yield curve and inflation positioning. The Fund offers a high degree of inflation protection over the medium- to long-term, and invests predominantly in sovereign bonds of highly rated OECD countries. The Fund’s risks consist primarily of changes in real yields for short and medium maturities which are generally lower then changes in comparable nominal yields. Changes to shorter-term inflation expectations play a significant role. The relative return compared to nominal bonds is determined by changes in current inflation and in short- and medium-term inflation expectation. Currency risks are predominantly hedged.

In addition to our Short/Medium Maturities strategy, investors have the option to choose another maturity profile with a focus on bonds over the entire maturity spectrum. Detailed information on our Nomura ILB All Maturities strategy (Nomura Real Return Fonds) can be found here.

Investment Approach

We believe in fundamental, research-based and long-term oriented investing. Our investment approach is rooted in thorough analysis and based on views formed by a global team of experienced investment professionals with diverse backgrounds and profound knowledge of financial markets. We believe that markets are not fully efficient and active management can provide an improved risk/return outcome.  

Investment Style

• Strategy: Top-down macro approach.
• Pure play: No credits, no structured products, FX risk largely hedged.
• Active positioning in inflation expectations and real yields by country and along the curve.
• Limited currency management.
• Credit risk: Focus on high quality OECD government bonds. No corporate credits.
• Interest rate risk: Primary exposure is to real yields of short- and medium term bonds – however, if rates rise due to increased inflation expectations, ILBs offer protection.
• Active risk: Tracking error typically up to 2% p.a.

Potential significant risks

Changes of real yields in the invested markets, especially in the US, the Eurozone and United Kingdom, are the biggest risk factors. Changes in short- to medium-term inflation expectations can also have a significant effect on the market price. This also applies, at least temporarily, to changes in the liquidity premium. However, the liquidity risk and the credit risk are low because the strategy invests predominantly in liquid sovereign bonds of highly rated OECD countries.

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Fund	ISIN	Annual Report	Semi-annual Report	Fact Sheet	Sales Prospectus	PRIIPs KIDs (German)
Class R EUR	DE000A1XDW13
Class I EUR	DE0008484452
Class I USD	DE000A1XDW54

As per January 2023

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