Vontobel Asset Management is to launch a fund that will invest in emerging market debt and currency.
The Vontobel Emerging Market Blend Fund will invest in debt denominated both in local currencies and external currencies.
The fund will be managed by Luc D’Hooge and portfolio managers Thierry Larose, Wouter van Overfelt and Sergey Goncharov.
Mr D’Hooge said: "This is an important milestone for our emerging markets clients as they can now access our best ideas in one fund product.
"We have a strong track record in delivering attractive returns in emerging market fixed income, so this fund follows the same active, value and contrarian investment philosophy as the other strategies that we manage."
The company has been testing the fund since 2015 without going live.
Over this time it has returned 12.8 per cent per annum on a net-of-fees basis for the institutional share class, outperforming its reference index by more than 7 per cent per annum.
Adrian Lowcock, head of personal investing at Willis Owen, said: "This is quite interesting as for a long time emerging market debt has often been separated into local currency and hard currency (US Dollar) but as the sector has evolved that split is arguably not as necessary as it once was and more importantly when it is it is much better to have a fund manager making the decisions on when to shift a portfolio of EMD from local to hard currency and from corporate to sovereign debt and vice versa."
But he added: "I would be nervous of investing in a fund which has been tested/launched since 2015. In a market such as EMD it doesn’t tell us much about how the strategy and managers are likely to perform across a broad range of markets especially in bear markets as downside protection is essential when investing in this asset class.
"The performance figures do look impressive and this year the fund has fallen less than the index so it does look promising, we’d just need to see more of the same. EMD remains a niche area for me and is only suitable as a small part of a diversified portfolio for investors will to take some risks."
david.thorpe@ft.com
