Hedge Funds Use Leverage to Reap 28% Return From Safest Debt

Among the top-performing European-domiciled bond funds last year, two Danish money managers investing in some of the safest debt in the market stand out.

The 28% return netted by Henrik Stille’s Global Rates Opportunity Fund at Nordea Asset Management and the 26% gain for Nicolai Rasmussen’s MIRA at Nykredit Bank AS look incongruous, given their focus on sedate forms of debt like covered bonds and highly-rated government notes. It’s put the pair atop a ranking that’s otherwise dominated by funds that reaped outsized profits from risky emerging-market debt.