Hedge fund inside Norway’s biggest bank reveals high yield bet

Inside the biggest bank in Norway, a hedge fund is going over the bond issuers that lost their investment-grade status during the Covid-19 crisis.

"With the low interest rates today, bond funds won’t give the return and protection investors need in their portfolios when there’s volatility in the stock market," says Anette Hjertø, head of absolute strategies at DNB Asset Management. Photo: PR / DNB AM

One of the strategies at DNB Asset Management's Multi Asset fund is to identify so-called fallen angels and place bets on those that appear to have been unfairly demoted to high yield earlier this year.

"It’s a strategy that picks up risk premia in the fallen angels segment," Anette Hjertø, who runs the fund from Oslo, said in an interview. "There will be good opportunities going forward after what has happened during the corona pandemic."

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