British investment firm M&G Investments has launched a pair of emerging markets funds focusing on hard currency debt and income opportunities respectively.
The M&G (Lux) Emerging Markets Hard Currency Fund will be managed by fund manager Claudia Calich and deputy fund manager Charles de Quinsonas that already manage the M&G Emerging Markets Bond Fund.
The fund aims to blend high-conviction macro calls with fundamental credit analysis to build a ‘best ideas’ portfolio from the fund’s investment universe.
The fund will seek to outperform the hard currency emerging markets bond market over a rolling period of three years.
At least 80% of the portfolio will be invested in emerging market bonds issued by governments or quasi-sovereigns agencies denominated in hard currency.
Second strategy launched is the M&G (Lux) Emerging Markets Income Opportunities Fund that will aim to deliver income (4-6% p.a.) and long-term capital growth by investing in EM equities and corporate debt.
Michael Bourke will be the fund manager and Charles de Quinsonas, deputy fund manager.
The team will follow a bottom-up approach. Stocks held in the portfolio will all be dividend-paying stocks, with a focus on potential long-term total return.
Corporate bonds will be selected through fundamental analysis, assessing corporates’ business and financial risk, and incorporating views on sovereign risk.
Graham Mason, CIO for M&G equity, multi-asset and retail fixed interest commented: “Emerging markets and developing economies account for 60% of the world’s GDP, presenting those investors who can navigate the higher uncertainty with better-yielding opportunities compared to developed markets.
“The funds we are launching leverage the proven track-record of our emerging markets equity and fixed income teams, who have over 100 years of combined investment experience.”
As of 31 March 2017, the firm managed €321.5bn of assets.