OP-EMD Hard Currency Sovereign

OP-EMD Hard Currency Sovereign mostly invests in fixed-income instruments issued or backed by governments, other public-sector entities or supranational organisations in emerging markets. The investments are broadly diversified across the emerging markets. The main target markets include Latin America, Asia and the Middle East. Those considering this fund should also note that changes in emerging countries' economic developments also have an impact on the fund's value through credit risk premiums. In addition, the economic situation, indebtedness and debt service capacity of the target market countries have a major effect on the fund's credit risk exposure.

OP-EMD Hard Currency Sovereign is a fund for a yield-oriented investor interested in global opportunities. The emerging fixed-income market is an asset class which can be used to conveniently diversify one's investment portfolio. It offers nice interest income potential with a relatively low volatility risk. This fund is mainly recommended to an investor who intends to redeem his/her units after four years at the earliest.

OP-EMD Hard Currency Sovereign (Fund) is a bond fund that mainly invests its assets in fixed-income instruments issued or guaranteed by governments, government-owned entities, government-controlled entities, other public-sector entities or supranational organisations in emerging markets. The Fund may use derivative instruments in its investment operations. The underlying assets of such derivative contracts may be interest rates, currencies or credit risks.

The modified duration of the Fund, a measure of the price sensitivity of a fixed-income investment to interest rate movements, is typically 5.0–8.0, which means that the Fund value will decrease by 5.0–8.0 percent if interest rates increase by one percentage point. If interest rates fall, the Fund’s value increases correspondingly. The main target markets are Latin America, Asia, Eastern Europe,Africa and the Middle East.

The emphasis of the investments is typically on long-term fixedincome products, so in terms of interest rate risk the Fund is on a par with long-term bond funds. The Fund usually aims to favour fixed-income instruments issued in the currencies of developed economies (so-called hard currency), particularly the U.S. dollar, and aims to hedge the currency risk against the euro.

The Fund’s benchmark index is the JPMorgan EMBI Global Diversified EUR Hedged. With active investing, the Fund seeks to outperform its benchmark index in the long term. The Fund mainly takes notable active risk and it may differ significantly from the composition, weights and risk level of the benchmark index.

The Fund promotes environmental and social characteristics and, to ensure it, uses environmental, social and governance (ESG) analysis and excludes certain investments. 

Negative screening: the Fund excludes countries with significant adverse impacts on society from its investments. The Fund does not invest in excluded countries, and if an investment product of the Fund later falls within the scope of the exclusion, the aim is to terminate the investment within a reasonable time period.

Use of ESG data in the analysis of investments: The average values of the sustainability indicators of the Fund’s investments are regularly monitored. The values of the indicators are considered when making investment decisions, and the average values of the portfolio and their development in relation to the benchmark index are monitored.

The investment process of the Fund includes analysing the creditworthiness of the investment products. In analysing creditworthiness, environmental and social characteristics as well as good governance are considered, among other factors.

• Sustainability-related disclosures >

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