Swiss & Global Asset Management Ltd is providing UK investors with access to the growing asset class of emerging market inflation-linked government bonds with the launch of the Julius Baer Emerging Markets Inflation Linked Bond Fund.
The fund, a UCITS III vehicle, will give investors the opportunity to turn emerging markets inflation into an advantage.
The emerging market inflation-linked government bond market is a fast-growing asset class of USD350 billion, equal to roughly 20% of outstanding inflation-linked bonds in the developed world. The market currently comprises of ten countries and their currencies: Argentina, Brazil, Chile, Colombia, Israel, Mexico, Korea, Poland, South Africa and Turkey.
Alessandro Ghidini, co-fund manager, Julius Baer Emerging Markets Inflation Linked Bond Fund, says: “The performance of emerging market economies and assets has been remarkable. In the turbulent past three years, emerging markets have outpaced their developed counterparts. Emerging market fixed income assets have generated cumulative total returns of 20 to 40 per cent since summer 2007, outperforming other global bond asset classes. Today, the outlook for many emerging markets and assets looks more attractive than ever.
Bernhard Urech, co-fund manager, Julius Baer Emerging Markets Inflation Linked Bond Fund, adds: ”The structural and cyclical forces that are helping emerging markets prosper are also fuelling inflation. Rising prices are a growing threat. Investors therefore face the challenge of how to best protect themselves against this trend while continuing to benefit from the compelling real rates and currency appreciation potential these markets offer. One interesting way is to buy protection via local inflation-linked government bonds.”
The fund is benchmarked against the Barclays Emerging Markets Government Inflation-Linked Bond Index ex Argentina, ex Colombia, constrained, un-hedged USD.
The Julius Baer Emerging Markets Inflation Linked Bond Fund is a Subfund of Julius Baer Multibond, a Luxembourg-domiciled SICAV, exclusively managed by Swiss & Global Asset Management Ltd., a member of the GAM groups.