Swiss & Global makes first foray into EM corporate bonds
Swiss asset manager Swiss & Global Asset Management has launched its first dedicated corporate bond fund investing in emerging markets.
The new fund adds to the existing range of four bond funds focused on emerging markets in an effort to offer investors a chance to further diversify their debt portfolios.
Emerging markets bonds have enjoyed high demand from investors this year, as their yields are much higher than those available from developed countries.
This investment option is particularly attractive for European investors looking outside the troubled Euro zone area for superior returns.
Oliver Roll, managing director of max.xs, a German fund marketing company, said Germans have shown continued appetite for appetite for credit, corporate bonds, high yield and, to a lesser extent, convertible bonds.
Swedish investors have also been going for corporate bonds this summer, according to Swedish insurer Skandia. They, too, have eyed emerging markets, along with their home economy.
Earlier this summer, Barings Asset Management revealed a new EM corporate bond fund. A well-respected emerging markets specialist, Barings said “emerging market corporate debt has the potential to offer attractive risk-adjusted returns over the medium and long-term.”
Swiss & Global’s JB Emerging Markets Corporate Bond Fund will be actively managed by Enzo Puntillo, Dorthe Fredsgaard Nielsen and Tania Minella.
The investment process combines a fundamental top down approach and bottom up analysis. Special attention will be paid to risk management, company strategy and corporate governance, as well as absolute and relative value analysis.
Enzo Puntillo, head of fixed income emerging markets, said: “Emerging markets are the undisputed driver of global growth and emerging corporates are benefiting from strong macro-economic fundamentals, low leverage, policy reforms and consumer growth.”
The total volume of the emerging market corporate debt universe is now around $1trn, three quarters of which is investment grade debt. It covers 38 countries, including Brazil, Hong Kong and China. It also includes Russia, which recently announced plans to make its corporate debt available to trade through Euroclear and therefore easier to access for foreign investors.