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Nomura Real Return Fonds

Nomura Global Inflation-Linked Bonds (ILBs)

Inflation-linked bonds protect investors from unexpectedly rising inflation rates. In times of historically very low inflation expectations but unprecedented central bank interventions, this quality of protection is attractive to many investors.

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 Return Fonds is based on our Nomura ILB All Maturities strategy.

Our All Maturities strategy focuses on delivering positive real returns, being able to invest in all maturities including the ultra-long end of the curve, with volatility below comparable nominal bond portfolios. Active returns are sought from both real yield curve and inflation positioning, possibly via futures or nominal bonds. The Fund offers a high degree of inflation protection over the medium- to long-term, and invests predominantly in the sovereign debt of highly rated OECD countries. Given the significant real yield duration of its benchmark, the Fund is sensitive to changes in real yields. However, changes in real yields are generally lower then changes in nominal yields. Currency risks are predominantly hedged. In addition to the All Maturities strategy, investors have the option to choose another risk profile with a focus on short-/medium maturity bonds. Detailed information on our Nomura ILB Short/Medium Maturities strategy (Nomura Real Protect 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: Primarily exposed to real yield changes – in contrast, 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 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.

Investment Objective

The fund primarily invests in inflation-indexed bonds of all maturities from domestic and foreign issuers of high credit rating. To actively manage inflation risk exposure nominal bonds and futures may be added. Foreign currencies are predominantly Euro-hedged. The investment in inflation-linked bonds enables the investor to benefit from globally rising inflation rates. Losses of purchasing power – measured against the price indices – can thus be offset in the medium to long term.

Fund Size

EUR 69.3 million (as at 31.10.2022)

Investment Company

Nomura Asset Management Europe KVG mbH

Fund Managers

Team Approach, Nomura Asset Management Europe KVG mbH

Launch Date

20.10.2004

Base Currency

EUR

Sector

Fixed Income – Global ILBs

Benchmark

Bloomberg World Government Inflation-Linked Bond Index EUR hedged

Domicile

Germany (Nomura Asset Management Europe KVG mbH)

Fund ISIN Annual
Report
Semi-annual
Report
Fact
Sheet
Sales
Prospectus
KIID
German
Class R EUR DE0008484361
Class I EUR DE000A1XDW21
Class I USD DE000A1XDW39

As per 12. January 2022