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Peter Eerdmans, manager of the £49.3m portfolio, said he was considering increasing the weighting from 2 to 10 per cent.

He said: "The broad expectation is that we will be getting there sometime in the fourth quarter, adding incrementally at 0.5 per cent a name. If we get more worried, we'll reduce the pace."

Mr Eerdmans said he was currently concerned about inflation, although Investec recently argued poor sentiment on this issue was already priced into the debt and had created a possible buying opportunity.

Investec added although yields were high, local currencies had been appreciating and were supported government bond performance in May.

Overall, the fund returned 15.2 per cent over the year to 16 June against 7.6 per cent for the Global Bond sector, finishing 10th out of 48 in the peer group.

Mr Eerdmans said he would build on these results with a bigger credit weighting in the long term. "Emerging markets are seeing the same kind of developments as the European market did five years ago," he said.

The manager remained positive on resource company debt after buying into Russian steel major Evraz Group.

He explained: "We stay away from the pure consumer sectors, and we're still cautious on the banking sector. Mobile telecoms in emerging markets we think is a strong growth area."

The manager also saw a shift from dollar-denominated emerging market credit towards emerging currencies.

"The moves we've done are in dollar debt, but with forwards it's easy to keep your currency exposure the same. The key in future is going to be local currencies.

"We will focus our positions in markets where we can hedge out the duration risk using a swap or a future." He cited Mexico, South Africa and eastern Europe as examples.