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EDITORIAL + CONTENTS
In this edition
Dear reader,
After an incredibly tough environment in 2022, investment markets and the broader global economy have shown resilience so far this year. Neverthe- less, the landscape remains uncertain. Even though energy prices have fallen back sharply from the spike caused by Russia’s invasion of Ukraine last year, inflation is still elevated in many parts of the developed world, causing
central banks to continue raising interest rates.
While returns of 3-4% can now be achieved via typically safe investments, this is well below current inflation. In order to extract returns to meet or exceed inflation over the coming months, investors may need to tolerate increased levels of risk. However, this stance could prove problematic, as inflation and volatility are tipped to stay high over the near term and geopolit- ical tensions – including the distressing war in Ukraine – remain. In addition, we are already seeing signs of the impact of tighter financial conditions, with the recent bank failures in the US and the deterioration within areas of the real estate market. As the allocation to stocks is typically the riskiest component of a diversified portfolio, investors are likely to increasingly seek equity solutions able to display resilience. In the cover story of nordic friends , the portfolio managers of our Global Stable Equity strat- egy explain why companies with robust underlying fundamentals are best placed to withstand elevated price pressures and further bouts of uncertainty. Resilience is also a term commonly associated with European covered bonds. While these assets have recently been impacted by the negative sentiment surrounding banks, this has opened up an opportunity for skilled active managers. Remember, there has never been a default in the European covered bond market since its inception more than two centuries ago! Finally, after years of seemingly unstoppable momentum behind ESG, sustainable investing has witnessed heightened debate recently. However, we remain convinced of the long-term merits of sustainability for both investors and corporates. As we embark on a multi-decade transition to a greener world, you will read why we believe it is crucial for investors to engage with today’s heavy emitters. From all of us at NAM, we would like to express our thanks for your ongoing trust and support. We wish you all the best for the summer period and look forward to seeing you soon.
Cover story
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Strength in stability In times of high volatility, global stable equities provide much-needed stability for the portfolio. Fund in focus 8 Engage for change It is through engagement with heavy emitting companies that real change becomes possible. Market view 12 Safe and sound For 200 years, European covered bonds have offered investors safety and protection. Macro opinion 15 Cool-down for the inflation Headline inflation is showing signs of easing. However, the relief is only temporary. Inside Nordea 16 The American edge US companies are catching up in terms of sustain- ability, which gives them an additional edge. ESG decrypted 19 Act sustainably. Invest socially. Addressing the ‘S’ in ESG is not just the right thing to do; it also makes financial sense. Lounge 20 The sustainability strategy bears fruit Midsummer. Let’s play! On the lookout for solutions Numerous awards for Nordea’s strategies Nordic point of view: Building for tomorrow
Yours faithfully,
Christophe Girondel Global Head of Institutional and Wholesale Distribution
ISSUE 01.2023
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