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Hedge funds can celebrate anniversary with solid results behind them

Danske Bank Asset Management’s latest two hedge funds can look back on three eventful years where the strategies adopted have so far proved their worth.

Hedge funds play a key role in our range of investment opportunities and are included in a number of our investment solutions.

The desire to create a strong and varied range of funds with alternative strategies was thus also one of the main reasons why the two funds, Danske Invest SICAV SIF – Fixed Income Global Value and Danske Invest SICAV SIF – Global Cross Asset Volatility, were launched in June 2018.

Both funds can potentially produce a positive return regardless of whether the financial markets rise or fall, as the funds can go short or long in their investments and also employ a number of financial instruments to manage risk.

Here, three years after their launch, both hedge funds have shown they work as intended, even during turbulent times on the financial markets. Both funds have thus achieved their return targets of delivering an annual return 4-6 per cent above the so-called risk-free rate. In 2019, Danske Invest SICAV SIF – Fixed Income Global Value was even honoured as Europe’s best fixed-income hedge fund at the EuroHedge Awards. In 2019, the fund generated a return of 11.6 per cent followed by 12.9 per cent in 2020.
“The first three years have without doubt been eventful from a market point of view. The corona crisis, in particular, produced a great deal of market volatility that tested the funds’ strategies – but our combination of fixed strategies and tactical ad hoc strategies proved their worth.”

Jacob Øland Jensen

Chief portfolio manager for Danske Invest SICAV SIF – Global Cross Asset Volatility
An eventful debut 
Whereas Danske Invest SICAV SIF – Fixed Income Global Value is mainly focused on liquid global bonds and other fixed income products like government bonds, government-sponsored bonds and mortgage-like bonds, Danske Invest SICAV SIF – Global Cross Asset Volatility focuses on volatility premiums in the global equity, fixed-income and FX markets.

“The first three years have without doubt been eventful from a market point of view. The corona crisis, in particular, produced a great deal of market volatility that tested the funds’ strategies – but our combination of fixed strategies and tactical ad hoc strategies proved their worth,” says Jacob Øland Jensen, chief portfolio manager for Danske Invest SICAV SIF – Global Cross Asset Volatility. While corona raged in 2020, the fund produced a return of 6.1 per cent.

However, it is important to realise that the opposite can occur and result in a negative return, which is what Danske Invest SICAV SIF – Global Cross Asset Volatility experienced in the first few months of the fund’s life until the team optimised and balanced the strategies. Since January 2019, the fund has delivered a return in line with its target.

Hedge funds with an international format
In 2018, the two funds joined an already extremely strong hedge fund team at Danske Bank Asset Management – a team that over several years has acquired considerable competence and achieved a great deal of international recognition for its work with various strategies. 

“Danske Bank Asset Management’s team of hedge fund managers greatly contributed to our fund getting off to a good start. When we launched Danske Invest SICAV – SIF Fixed Income Global Value three years ago, the head of hedge funds, Michael Petry, made sure we were well integrated into the existing team of hedge fund managers. That meant we could draw on their experience and deep insight. We have also benefited from having access to some of the industry’s leading risk analysts, headed up by Per Søgaard,” explains Anders Møller Lumholtz, chief portfolio manager for Danske Invest SICAV SIF – Fixed Income Global Value.

Investors should be fully aware that investing always entails a risk – and that also applies to investing in hedge funds. You can find factsheets, prospectuses and key investor information for the funds at danskeinvest.lu.

This material has been prepared for information purposes only and does not constitute investment advice. Note that historical return and forecasts on future developments are not a reliable indicator of future return, which may be negative. Always consult with professional advisors on legal, tax, financial and other matters that may be relevant to assessing the suitability and appropriateness of an investment.

FACTSHEET - Danske Invest SICAV – SIF Fixed Income Global Value Class C p
ISIN:LU1807294290
Investment focus:Global fixed income hedge fund focused mainly on liquid bonds and other fixed income products
Return target (annual):4-6 per cent above the risk-free rate
Risk indicator (1-7):5
Annual return:2021 (to 31/5) 4.46% - 2020: 12.85% - 2019: 11.60% - 2018 (from June): 2.25%
Note that:The fund makes use of gearing and employs derivative financial instruments, such as swaps, options and futures.
Team:Anders Møller Lumholtz, chief portfolio manager, Edi Zulfaj, senior portfolio manager, Anders Vestergård Fischer, senior portfolio manager.
FACTSHEET - Danske Invest SICAV – SIF Global Cross Asset Volatility Class C p
ISIN:LU1807292328
Investment focus:Global volatility hedge fund with exposure to global equity, fixed income and FX markets
Return target (annual):4-6 per cent above the risk-free rate
Risk indicator (1-7):5
Annual return:2021 (to 31/5): 6.16% - 2020: 6.05% - 2019: 3.24% - 2018 (from June) -4.41%
Note that:The fund makes use of gearing and employs derivative financial instruments, such as swaps, options and futures 
Team:Jacob Øland Jensen, chief portfolio manager, Mads Vestergaard Jensen, senior portfolio manager

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