Fixed Income Boutique Emerging Markets Bonds

Vontobel Fund - Sustainable Emerging Markets Local Currency Bond

ISIN
LU0563307981
Valor
12061804

Fund strategy

Investment objective

This bond fund aims to generate the best possible investment returns over a full economic cycle, while respecting risk diversification.


Key features

The fund invests across emerging markets, mainly in government bonds of diverse qualities with different maturities in various local currencies. The fund uses derivative financial instruments both for hedging purposes and to gain selective exposures to interest rates and currencies.


Approach

The compact and agile investment team of experienced specialists uses a proprietary sustainability model to define the investment universe. It excludes countries that do not meet specific environmental, social and governance criteria. To identify investment opportunities generated by country-specific mispricing, the team continuously assesses market conditions and outlook, based on in-depth macro-economic, technical and valuation analyses. Accordingly, they allocate interest rate and currency risks and select those securities and instruments within the investment universe whose yield and/or hedging values convince them the most. The team flexibly adapts the portfolio to seize attractive opportunities whenever they occur.

101.67
NAV
-1.35%
Performance YTD
4 stars
As at Aug 10 2020 As of Jun 30 2020

Why invest?

  • Benchmark agnostic: Capturing opportunities across the full emerging market local currency investment universe without a skew towards the bigger economies reflected in the key benchmark indices
  • High conviction: Benchmark-following investors create inefficiencies that active managers can exploit
  • ESG as a risk tool: Sustainability criteria provide predictability and stability to investors

"In addition to providing returns, when a country improves its sustainability metrics, it will probably result in avoiding drawdowns and increased volatility."

Thierry Larose, Senior Portfolio Manager

Our investment process

We apply a four-step process, which combines top-down strategic themes and bottom-up analysis to generate returns.

The process includes adherence to sustainability criteria, such as excluding issuers from countries classified as “not free” by the non-governmental organization Freedom House.

infograph-product-sustainable-em-local-currency_en

Investment opportunity – sustainability drives returns

The emerging market investment universe consists of around 90 countries spread across the globe, of which around 50 have an investable local-debt market.

For many other managers, their “neutral” position is based on the benchmark, our portfolio, however, is a conviction-weighted portfolio.

We view the emerging debt markets as inefficient. These inefficiencies create opportunities for an active manager. In local currency bonds (debt denominated in the currency of the bond’s issuer), the inefficiencies are mainly structural, constraint-driven and governance related. By identifying and analyzing these inefficiencies, we aim to find opportunities that will deliver long-term performance.

We see sustainability as an important driver of long-term returns, a country that strives to improve governance sustainability (the strength of its institutions, more freedom, and democracy in the system etc.), will eventually present investors with more sustainable economic growth. Improving sustainability delivers predictability and stability, thus avoiding drawdowns and volatility.

Investment philosophy – inefficiencies lead to opportunities

Segmented markets and risk aversion offer high return, low volatility and decorrelated opportunities. Our investment philosophy rests on two inefficiencies and sources of performance:

infograph-boutique-fixed-income-em-inefficiencies_en

Investment team

Senior Portfolio Managers Thierry Larose and Carl Vermassen of the Vontobel Asset Management Emerging Market Bonds team manage the fund. The team also has at its disposal the full capabilities of the Zurich-based Fixed Income boutique. This optimal team structure enables proactive early idea generation and implementation.

All data is as at Jun 30 2020 unless otherwise indicated.

Daily Performance

Periodic Performance

1M YTD 3Y 5Y SI
I USD 0.4% -4.4% 0.4% 1.7% -1.5%
Index 0.5% -6.9% 1.1% 2.3% 6.0%

Rolling Performance

Jul 01 2015 - Jun 30 2016 Jul 01 2016 - Jun 30 2017 Jul 01 2017 - Jun 30 2018 Jul 01 2018 - Jun 30 2019 Jul 01 2019 - Jun 30 2020
I USD 1.3% 6.1% -2.7% 6.4% -2.3%
Index 2.2% 6.1% -2.3% 9.0% -2.8%

Annual Performance

Risk Data

Portfolio
Volatility 12.2%
Sharpe ratio negative
Information ratio negative
Tracking error 2.6%
Jensens alpha -0.7%
Beta 0.9
Modified duration 6.6
Average coupon 5.7%
Yield to maturity 5.2%
[3 years annualized]
Past performance is not a reliable indicator of current or future performance. Performance data does not take into account any commissions and costs charged when shares of the fund are issued and redeemed, if applicable. The return of the fund may go down as well as up due to changes in rates of exchange between currencies. The value of the money invested in the fund can increase or decrease and there is no guarantee that all or part of your invested capital can be redeemed.

All data is as at Aug 10 2020 unless otherwise indicated.

Fund data
Portfolio Manager Thierry Larose/Carl Vermassen
Fund Domicile Luxembourg
Fund Currency USD
Share Class Currency USD
End of fiscal year 31 August
Index J.P. Morgan GBI EM Global Diversified Composite USD
Share Class Launch date Jan 25 2011
Distribution type Accum
Swinging single pricing Yes
Fund Registrations AT, CH, DE, ES, FI, FR, GB, IT, LI, LU, NL, NO, PT, SG
Share Class Registrations AT, CH, DE, FI, GB, IT, LI, LU, NL, NO, SG
Nav Information
Highest since launch 116.59
Lowest since launch 77.98
Fund volume in mln. USD 213.97
Share class volume in mln. USD 134.65
Fees And Expenses
Management fee 0.60%
TER 0.90% (Feb 28 2020)
Identifiers
ISIN LU0563307981
Valor 12061804
Bloomberg VEMKBDI LX
WKN A1H39Z
Parties
Depository RBC Investor Services Bank S.A.
Management Company Vontobel Asset Management S.A.
Swiss Paying Agent Bank Vontobel AG
Swiss Representative Vontobel Fonds Services AG

Available Share Classes

Share class Currency ISIN Distrib. Type Launch date Management fee TER TER Date
A USD LU0563307551 Dist Retail Jan 25 2011 1.20% 1.56% Feb 28 2020
AM USD LU0563307635 Dist Retail Jun 25 2012 1.60% 1.96% Feb 28 2020
AN USD LU1683487208 Dist Retail Oct 11 2017 0.60% 0.94% Feb 28 2020
B EUR LU0752071745 Accum Retail Mar 12 2012 1.20% 1.56% Feb 28 2020
B CHF LU0752070267 Accum Retail Mar 12 2012 1.20% 1.56% Feb 28 2020
B USD LU0563307718 Accum Retail Jan 25 2011 1.20% 1.56% Feb 28 2020
C USD LU0563307809 Accum Retail Jan 25 2011 1.60% 1.96% Feb 28 2020
H (hedged) CHF LU0563308369 Accum Retail Jan 18 2011 1.20% 1.62% Feb 28 2020
H (hedged) EUR LU0563308443 Accum Retail Jan 25 2011 1.20% 1.62% Feb 28 2020
HI (hedged) CHF LU0563308799 Accum Institutional Mar 16 2011 0.60% 0.96% Feb 28 2020
HI (hedged) EUR LU0563308872 Accum Institutional Apr 10 2014 0.60% 0.96% Feb 28 2020
HN (hedged) CHF LU1683483470 Accum Retail Oct 05 2017 0.60% 1.00% Feb 28 2020
HN (hedged) EUR LU1683487380 Accum Retail Oct 12 2017 0.60% 1.00% Feb 28 2020
I USD LU0563307981 Accum Institutional Jan 25 2011 0.60% 0.90% Feb 28 2020
N USD LU1683483124 Accum Retail Oct 05 2017 0.60% 0.94% Feb 28 2020
Click here to see an overview of our shareclass naming convention.

* TER includes performance fee where applicable

All data is as at Jun 30 2020 unless otherwise indicated.

Rating Structure

Currency Weighting

Document Date DE EN ES FR IT
Factsheets & Commentaries
Factsheet Jun 2020
Monthly Commentary Jul 2020
KIIDs
KIID Jul 2020
Legal Documents
Articles of Association Apr 2016
Notification to Investors Apr 2020
Sales Prospectus Dec 2019
Financial Reports
Annual Report Aug 2019
Dividend Payout Jan 2019
Semi-Annual Report Feb 2020
Dealing Information
Holiday Calendar 2020 Jan 2020
List of Active Retail Share Classes Dec 2018
Policies
Sanctioned Countries Sep 2016
Shareclass Naming Convention Nov 2019
  • Limited participation in the potential of single securities

  • Success of single security analysis and active management cannot be guaranteed

  • It cannot be guaranteed that the investor will recover the capital invested

  • Derivatives entail risks relating to liquidity, leverage and credit fluctuations, illiquidity and volatility

  • Interest rates may vary, bonds suffer price declines on rising interest rates

  • Investments in foreign currencies are subject to currency fluctuations

  • Investments in emerging markets may be affected by political developments, currency fluctuations, illiquidity and volatility

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