Swiss & Global launches JB Emerging Markets Opportunities Bond Fund
Swiss & Global Asset Management is expanding its family of emerging markets bond funds with the launch of the JB Emerging Markets Opportunities Bond Fund.
The new fund offers investors access to emerging-markets bonds denominated in hard and local currency and aims to achieve annual returns of six to 10 per cent with volatility of between five and seven per cent.
Independent of benchmarks, the fund invests in bonds of emerging markets where fundamental data indicates the country is reaching an inflection point. The portfolio management is unconstrained in terms of investable bond segments and credit ratings.
Enzo Puntillo, head and chief investment officer of fixed income emerging markets, Swiss & Global Asset Management, says: “We focus on countries where changing fundamentals are not yet fully reflected in bond valuations. The opportunities and risks of emerging markets change over time, and both fundamental data and valuations can create earnings drivers for EM bonds. Bonds, interest rates and currencies react differently to various influencing factors, necessitating individual analysis of each of these segments.”
Puntillo manages the fund portfolio together with a team of 12 emerging markets experts.
The fund’s objective is to identify the emerging markets bonds in hard or local currency that offer the best opportunities. The portfolio management is unconstrained in terms of the investment universe or any benchmark, and can invest in both government and corporate bonds with varying credit ratings, with or without inflation hedging.
When deciding whether to invest in hard-currency or local bonds, the fund uses a three-stage analysis approach. As a first step, the portfolio managers evaluate the fundamental country research and identify countries which are at a turning point. The team then evaluates the fundamental data compared to the valuations of the hard-currency or local-currency market at a country level. Subsequently, they evaluate the attractiveness of the respective currencies separately from the bond allocation.
At present, the largest country positions in local currency include Brazil, Mexico and Poland. In hard currencies, the fund is invested in Indonesian and eastern European government bonds, including Slovenia and Croatia.
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