Euro Pacific Asset Management, a California-based asset manager affiliated with Peter Schiff’s Euro Pacific Capital, has launched the EuroPac International Bond Fund.
The fund seeks to preserve purchasing power and generate income through exposure to non-dollar government and corporate debt.
The fund is run by Schiff and Jim Nelson, the same team that oversees the firm’s other fund, the EuroPac International Value Fund.
Catering to investors who seek non-dollar exposure, the fund will concentrate on bonds from countries with positive macroeconomic fundamentals. Selection criteria include favourable GDP growth estimates, positive trade balances, high real interest rates, low debt-GDP, low unemployment rates and favourable demographics. The fund will typically be underweight Western Europe and Japan, and overweight emerging markets and the resource economies.
The fund will invest primarily in investment grade government bonds, with the remainder in what the managers believe are undervalued corporate bonds. Given the current low interest rate environment, the initial preference will be for short duration bonds.