OP-Bond Yield (Fund) is a long-term bond fund that mainly invests in fixed-income instruments issued by euro area governments with a minimum credit rating of BBB- or comparable. These investments’ share of the Fund's value may vary between 75% and 100%. The Fund's investments are mainly direct fixed-income investments. The Fund may use derivative instruments in order to hedge against adverse market movements, to replace direct investments and to otherwise promote effective portfolio management. Derivative contracts used in portfolio management can include, for example, interest rate swaps or futures whose underlying instruments are government bonds. The Fund hedges its non-euro investments against currency risks as fully as possible.
The modified duration of the Fund, a measure of the price sensitivity of a fixed-income investment to interest rate movements, is typically 6–10, which means that the Fund value will decrease by 6–10 percent if interest rates increase by one percentage point. If interest rates fall, the Fund’s value increases correspondingly.
The Fund's portfolio management makes investment decisions on the basis of the prevailing market view at the time. The Fund's investment decisions specifically highlight controlling the Fund's interest rate risk and interest rate risk distribution and weights between various countries.
The Fund’s benchmark index is Barclays EuroAgg Treasury Total Return Index Value Unhedged EUR. 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.
