Fixed income funds

Effective diversification and hedging against market risk.

With fixed income funds, you can seek returns from the fixed income market.

You can reduce the market risk of your investments by diversifying your assets into fixed income investments.

The value of fixed income funds typically fluctuates less than that of equity funds.

Fixed income funds diversify their assets in terms of time, territory and instruments.

Find the fixed income fund best suited to your needs

Fixed income funds offer suitable alternatives for savers and investors looking for steady value performance at a low risk level. Short-term fixed income funds are suitable for short-term investing and long-term bond funds for long-term investing. The value fluctuation of fixed income funds is more moderate than that of equity investments, for example.

Diversification is an essential part of risk management in investing, and fixed income funds are a good addition to other investment products. Fixed income investments are made in both domestic and international instruments. Current interest rates have made fixed income funds a popular investment option.

Short-term fixed income funds

Short-term fixed income funds invest their assets in short-term money market instruments such as treasury bills, banks’ certificates of deposit, local authority bills and commercial papers. These mature on average within one year.

Long-term bond funds

Long-term bond funds mainly invest in bonds with a maturity of more than one year and in other fixed income instruments. Bonds can be issued by governments, other public entities and companies. Very high-risk corporate bonds are called high yield bonds.

Intermediate-term bond funds

Intermediate-term bond funds invest in both short-term and long-term fixed income instruments based on the expected return on the fixed income market.

Yield and risk of fixed income funds

The yield on fixed income funds consists of the coupon rate paid on the investment and any increase in the value of investments. The value of fixed income funds is also influenced by changes in interest rates and the economic situation.
Fixed income funds come in various risk categories. The most significant risk is interest rate risk, which is measured with an indicator called duration. Simply put, the greater the duration, the higher the risk.

Example: if the duration of a bond or fund unit is 5, this means the price of the bond will change by approximately 5% if the interest yield changes by one percentage point.

Funds with a higher risk level can offer a higher yield, but their value can also fluctuate more than that of funds with a lower risk level. Further details about the performance and risks of funds are available in the fund’s Key Information Document. Investment always involves risk. It is possible to lose some or all of the invested assets.

Fixed income funds as part of well-diversified investments

Fixed income funds diversify their assets in terms of time, territory and instruments. From the investor’s perspective, this means that diversification is effective and the yield on their fixed income investment does not hinge on the performance of a single bond.

Investing in fixed income funds is easy and flexible

If you invest directly in bonds you need more capital to invest and are tied to the predetermined maturity of the fixed income investment. In turn, fixed income funds allow smaller one-off or monthly investments. You can also sell your investment in the fund at any time, ensuring flexible access to your assets.

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This is an advertisement. The funds are managed by OP Fund Management Company Ltd. The portfolio manager is the portfolio management company specified in the fund prospectus for OP funds. Investments always involve risks. The value of investments can rise and fall, and the investor may lose part of or all the invested funds. Past performance is no guarantee of potential future yield. The larger the fund’s expenses, the greater the impact on the expected return on the investment. Any yield also depends on taxation, which in turn varies depending on the investor’s personal circumstances and is subject to future changes. If the fund is marketed outside Finland, OP Fund Management Company Ltd may decide to end such marketing. The information presented on this page does not fully describe all the fund’s characteristics.

Before making an investment decision, take all the characteristics or objectives of the fund into consideration, as described in the fund prospectus for OP funds and other documents related to the fund. Only make your final investment decision after reading the fund prospectus for OP funds and the key investor information document and rules of the fund. These documents can be found on the web page of the respective fund. The fund prospectus and the summary of investors’ rights in mutual funds are available at op.fi in Finnish, Swedish and English.