The objective of the Fund is to generate a high absolute return primarily through an investment programme utilising conventional and alternative trading strategies including short selling, the use of derivatives for hedging and speculative purposes and the use of leverage. The target return is the risk free rate plus 4 percent.
Danske Invest Hedge Fixed Income Strategies is a relative value fund, aiming to reduce market risk. Thus, over time the return should not depend on whether interest rates rise or fall. The return is instead dependent on the relative and absolute pricing in the Scandinavian, Euroland and US fixed income markets.
The Fund will generate value by exploiting inefficiencies in the markets and by collecting a number of well-established premiums, such as liquidity premiums, volatility premiums and complexity premiums. The Fund will only invest in high rated bonds.