OP-High Yield (Fund) is a long-term bond fund which mainly invests its assets in bonds issued by companies whose credit rating for long-term debt is BB+ at the most, or similar. Investments are primarily made in bonds issued in the European Economic Area. The share of these investments typically varies between 75 and 100%. 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 2.5–5.0, which means that the Fund value will decrease by 2.5–5.0 percent if interest rates increase by one percentage point. If interest rates fall, the Fund’s value increases correspondingly.
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. The Fund may also invest in derivative contracts intended for credit risk transfer. Derivatives are chiefly used to manage interest rate and credit risks.
The Fund diversifies its investments broadly across various issuers' bonds. The Fund normally invests in some 70–100 issuers' fixed-income instruments but this number may vary depending on the portfolio manager's view.
The Fund’s benchmark is Barclays Pan European High Yield Index (3% constrained, Euro 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.