Standard Life Investments has launched a second Global Emerging Markets Debt fund, for retail and institutional investors in Europe.
The new local currency fund is part of a selection of funds planned for the new emerging market debt (EMD) team, and is managed by Kieran Curtis who has 11 years fixed income investment experience, and a strong record in managing EMD portfolios.
The new fund will complement the EMD OEIC fund launched by Standard Life Investments in October last year. It will initially be available to investors in the UK, Switzerland, The Netherlands and Luxembourg, allowing them access to this growing and truly diverse sector of the market, alongside Standard Life Investments’ experience in managing both global emerging markets and fixed income. The fund will be registered in other European countries in due course.
Euan Munro (pictured), head of multi-asset investing and fixed income, Standard Life Investments, says: “The prospects of emerging markets (EM) differ from those of developed markets and economic growth expectations are generally more favourable. Fiscal deficits are significantly lower than in the developed world, and with high growth rates, the debt to GDP ratios are typically low or falling. But this strong fundamental backdrop has not been fully priced in so on valuation grounds, emerging market economies are relatively cheap, presenting investors with opportunities for capital appreciation.
“The active currency exposure within the new fund provides an opportunity to further enhance returns, and the improving credit ratings of EM countries has led to greater liquidity and less volatility.
“However, in recent weeks some EM currencies have experienced depreciations against hard currencies such as the US Dollar. We recognise that the fundamental backdrop of some countries has deteriorated; therefore investors need to be discerning when they think about emerging markets which ties into our active approach to EMD portfolio management. Despite recent wobbles, money flows into the asset class have been consistently positive over the last few years and it now comprises a significant proportion of the global bond market, around 12 per cent.”
