New Amundi fund expands range of inflation-linked products
Amundi, the European investment management company, has launched Amundi Funds Bond Emerging Inflation, a sub-fund of its Luxembourg SICAV Amundi Funds.
The new fund will enable clients to protect themselves against inflation and to benefit from investment and growth opportunities offered by emerging markets, the company said in a statement.
Emerging markets continue to be the driving force behind world growth, but that growth comes with rising inflation due to increases in food and commodity prices. In this environment, inflation-linked bonds are among the only investment vehicles to offer real protection against inflation through indexation and liquidity, Amundi said.
The new bonds differ from conventional ones in several ways, the company said. Their redemption price is indexed to inflation making them more interesting for investors than fixed-rate bonds, though inflation-linked bonds offer a lower coupon than conventional bonds. Expected yields for fixed-rate bonds are equal to their yield to maturity, but yields for inflation-linked bonds are equal to maturity plus the inflation rate.
The number of inflation-linked bonds issued by emerging countries has increased considerably in recent years with eight issuing countries and more than 70 bonds issued.
Investment in the new fund includes continuous and rigorous risk management, Amundi said. The new fund is managed by a fixed income team of more than 30 professionals managing €338bn.