IS Funds Ltd. has established two new investment funds


IS Funds Ltd. has established two new investment funds that invest mainly in covered bonds. One of the new funds will invest in a mixture of indexed and nominal bonds, and the other will invest in indexed bonds only.

Covered bonds are issued by the commercial banks and are backed by an underlying collateral portfolio in addition to the issuer guarantee. The bonds therefore have special collateral rights, making them less risky for investors. At present, the three issuers of covered bonds in Iceland – Arion Bank, Íslandsbanki, and Landsbankinn – use their covered issues to finance mortgage lending. The market for covered bonds has grown substantially in the recent term, and the three banks’ issues currently exceed 100, including more than 50 issued this year.

Haraldur Örn Ólafsson, Managing Director of IS Funds:
“We have great confidence in the expansion of the market for covered bonds and are convinced that now is the time to increase our presence in that market. IS Funds is a leader in the bond market, and our new funds are a response to the changes currently taking place in residential mortgage financing.”

IS Funds Ltd. is a specialised fund management company with over ISK 100bn under management in its bond funds. It is a subsidiary of Íslandsbanki. Further information on the new funds can be obtained from VÍB, Íslandsbanki’s Wealth Management Division, at tel: +354 440-4900.

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