The historically low yield environment in Europe have turned the bond markets upside down. For investors looking for low risk investments, this means they ought to pay extra attention as to where the returns are expected to come from. Because of this development, Danske Invest is flagging funds that are to be particularly affected by the low interest rate level.
“We have chosen to flag a number of our investment funds, where our investors need to pay attention to their return options, given the current low interest level. This applies first and foremost to a number of our low risk bond funds. By doing so”, said Danske Invest Investment Specialist Kim Thelle Pilgaard, “we are aligned with our main distributor, Danske Bank, who have introduced similar information on a number of investment funds when you trades investment funds in eBanking”.
Discuss the possibilities with your advisor
The future return in the bond market is dependent on the interest level going forward. Even though the expected return in the flagged funds are affected by the low interest rate environment, the funds might still be relevant in a diversified portfolio for the individual investor.
“Whether to include the flagged funds in your portfolio depends on a number of factors. This includes the composition of your other investments, your expectations to the development of interest rates, your risk appetite as well as your time horizon. As for all other investments in Danske Invest funds”, concludes Kim Thelle Pilgaard, “we always recommend you to discuss the suitability with your advisor”.
The indicator appears in the fund listings
as well on the webpages for the individual funds in question.