Unusually high interest rates in the high-yield market - this is a unique opportunity!

At the same time as interest rates in the high-yield market are exceptionally high, Kraft Fondene is now launching a new high-yield fund. Get to know Kraft Nordic Bonds.

Since 2019, Thorstensen has managed Kraft Fondenes first high-yield fund, Kraft Høyrente. The fund has become a sought-after investment opportunity among the company's customers. On the three-year anniversary, Kraft Høyrente had delivered an annualised return of 6.65 per cent, corresponding to a total return of 21.65 per cent. The new fund, Kraft Nordic Bonds, will be managed according to the same strategy and philosophy as Kraft Høyrente.

In recent years, Kraft Fondene has experienced explosive growth in the number of customers wishing to move capital away from traditional bank savings and into high-yield funds. Both private individuals and business leaders have grown tired of the poor returns they have received on their own or their company's surplus liquidity.

- We are currently experiencing unusually attractive interest rate and risk premiums in high-quality bonds, which is why this may be a rare opportunity. There are good opportunities for good returns at a reasonable risk that we have not seen for over 15 years.

Øivind Thorstensen, portfolio manager of Kraft Nordic Bonds.

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High-yield funds are in the wind

Georg Gøllner, head of Kraft Fondene, is very pleased that they have now launched their second high-yield fund. The fund has been very well received by investors, and in just three months it has attracted total assets of more than NOK 300 million. Gøllner also emphasises the high effective interest rate that can currently be found in Nordic credit. "The timing of the launch of Kraft Nordic Bonds could hardly have been better.

Figures from the Norwegian Mutual Fund Association show that high-yield funds were by far the most popular fund category in recent months. During the period, more than half of Norwegians' investments have been placed in high-yield funds. In a historical perspective, for example over rolling five-year periods, the return on high-yield funds has not been much lower than in the stock market.

- "Investing in a high-yield fund provides excellent diversification for the rest of your investment portfolio. Our high-yield fund is a good alternative for individuals or companies that want better earnings on surplus liquidity," says Gøllner.

- Kraft Høyrente is also a popular choice for customers who don't want to be exposed to the risks associated with the stock market," he adds.

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Solid management philosophy

Kraft Nordic Bonds will, like Kraft Høyrente, be managed by Øivind Thorstensen. He is joined by Simen André Aarsland Øgreid as co-manager. The management strategy for Kraft Nordic Bonds is the same one that has formed the basis for the success of Kraft Høyrente.

Thorstensen therefore aims to have portfolios that best represent a cross-section of the Norwegian and Nordic core economy.

- "We prefer to invest in companies with a proven business model and that are preferably leaders in their sector. In addition, it is important that the companies have experienced management, a healthy balance sheet, good cash flow and that they have demonstrated a willingness and ability to pay interest and principal over time," says Thorstensen.

He says that the high-yield funds have portfolios consisting of 40-50 companies and have a greater focus on the qualities of each individual company, rather than specific sectors.

- As managers, we constantly strive to optimise risk-adjusted returns. Among other things, this involves actively repricing the portfolio. Either by arbitraging the yield curve at the issuer, where various loan maturities may be mispriced, or mispriced relative to comparable companies. It is equally important to constantly replicate and change the composition of the portfolio, whether the company's deliveries over time are good or bad, and when market conditions change. Finally, good management is also based on the ability to take gains and losses when appropriate.

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Maaseide's commitment to finance

Power Finance is one of Bjørn Maaseide's major ventures in finance, and today he owns 45 per cent of the company.

Maaseide himself has chosen to invest a significant proportion of his own surplus liquidity in high-yield funds.

- I am very pleased with the development of Kraft Høyrente. Investing capital in a high-yield fund is a sensible investment of liquid assets. This contributes to good diversification in the portfolio.

Bjørn Maaseide

Popular model portfolios

Kraft Høyrente and Kraft Nordic Bonds are also two of the funds in the model portfolios that Kraft Finans offers its customers. Model portfolios are investments in what Kraft Finans believes are the best equity and fixed income funds.

The customer's return expectations and risk profile determine how much fixed income and equity funds the model portfolios contain. Kraft Finans has its own selection group that chooses among the best equity and fixed-income funds and selects from over 50,000 funds from around the world.

Today, model portfolios are one of Kraft Finans' most popular investment products. The fund portfolios aim to provide fund investments with the necessary diversification so that the customer can achieve the best possible risk-adjusted return in the long term.

- Anyone with surplus capital who is considering investing money should have a majority of liquid investments in their portfolio. The mutual fund market is particularly well suited to safeguarding the customer's liquidity, flexibility, risk profile and security. All the funds we use are subject to regulation and supervision by the authorities. Our model portfolios invest in a cross-section of the global economy, and are designed to give investors the best possible return at the lowest possible risk," says Georg Gøllner.

Key figures Kraft Høyrente

9,49 %

Return in 2021

9,5 %

Effective interest rate

6,91 %

Return in 2020

1713 mill.

Fund size

Customers gave Kraft Finans an AAA rating

In recent years, Kraft Finans has built up a comprehensive advisory service and manages the surplus liquidity of individuals, families and companies. The company now has over NOK 6 billion under management and over 2,000 customers.

The customers' investments are mainly placed in fund portfolios, equities, property and the company's own high-interest funds, Kraft Nordic Bonds and Kraft Høyrente. Kraft Finans currently has offices in Oslo, Kristiansand, Sandnes, Bergen, Ålesund, Trondheim and Tromsø.

The analysis and consultancy company INNSIKT (formerly Markedsføringshuset) recently conducted a customer survey aimed at customers of Kraft Finans. According to the customers, the company delivers consistently well in all phases of the collaboration and gives the company an impressive score of 82 points out of a possible 100.

The high score on the customer survey means that Insight has now given Kraft Finans an AAA rating in customer satisfaction. CEO of Kraft Finans, Sveinung Byberg, is delighted that the company has once again scored highly in customer surveys:

- We are very proud of this result. Our customers are very satisfied with the advisory services we provide, and it's particularly pleasing to see that we have employees who are positive to work with.

Sveinung Byberg, CEO of Kraft Finans

Power Finance

Kraft Finans AS is a Norwegian investment firm that offers asset management to individuals, companies and foundations. The company has offices in Bergen, Tromsø, Trondheim, Ålesund, Oslo, Sandnes and Kristiansand. Kraft Finans advises and manages more than NOK 6 billion and has more than 2,000 customers.

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All forms of investments involve a degree of risk. Kraft Finans emphasizes that investments in Kraft Fondene will always carry uncertainty regarding future returns. The change in value can be substantial, minimal, absent, or negative, and in extreme cases, almost worthless. Historical returns are not a guarantee of future performance. Returns depend, among other things, on the overall development of the securities market, the fund's risk profile, the fund's costs, and the manager's general success in selecting investments for the portfolio. The management of Kraft Fondene will be carried out to the best of their ability, and the information in this document is prepared accordingly, but it should not be understood as providing any guarantees or promises of future returns. For additional information, please refer to Kraft Fondene's product information available at kraftfondene.no and Kraft Finans' general business terms available at kraftfinans.no.
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