With only a paltry USD50.7 billion in bonds issued across the Eurozone in May, conditions were far from ideal for Nomura when it launched its IRISX4 absolute return Ucits fund on May 20^th, which invests across the interest rate curves of six markets. “The first few days were tough but we’re now in positive territory,” says Jean-Philippe Royer, head of Fixed Income Fund Solutions Group at Nomura. June saw the fund up 0.48 per cent, whilst last month it returned 0.91 per cent: up 0.34 per cent as of end-July. Royer notes that, of the four trading strategies used, the curve strategy has been the one most adversely affected by the Euro crisis. “One strategy in particular – momentum trading on the short end of the curve – has been tremendous,” comments Royer. “We’re also relatively long bonds in the US and Canada, and fairly neutral on UK, Eurozone, Japan and Australia.” IRISX4 currently holds 40 trading positions, using absolute VaR to manage daily risk. “You need a long-term view when investing in IRISX4,” adds Royer. “The Euro market has stabilized and we’re pleased our strategy is heading in the right direction and bringing the benefits we expected it to bring.”