Government Portfolio well received
In December 2008, Íslandsbanki launched a new mutual fund named the Government Portfolio. The fund invests exclusively in government-guaranteed bonds and deposits with financial institutions. Its purpose is to meet the currently high demand for low-risk investment options. The Government Portfolio has been very well received by investors and already has assets of ISK 6 billion.
A short average maturity of the fund's bonds results in their relatively limited price fluctuations in response to changes in their market yields. The portfolio's active management also makes use of market fluctuations to earn higher long-term returns than when investing in savings accounts only. The fund's investment strategy is to invest 70% in Treasury bonds and 30% in deposits with financial institutions. Its prudent asset mix ensures a low-risk portfolio. The Government Portfolio is well suited for individuals wishing to invest for one year or longer as well as for institutional investors. It offers both individual purchases and regular subscription.
Government Portfolio's key advantages:
- Solid holdings in government-backed bonds and financial institution deposits
- Active asset management
- Low costs
- Instant access - redeemable with one day's notice