Head of Emerging Market Corporates, Senior Portfolio Manager
This bond fund aims to generate the best possible investment returns over a full economic cycle, while respecting risk diversification.
The fund invests across emerging markets mainly in corporate bonds of diverse qualities with different maturities in various hard currencies. In addition, the fund may have limited exposure to emerging market government bonds in local currencies. The fund uses derivative financial instruments, primarily for hedging purposes.
The compact and agile investment team of experienced emerging market specialists focuses on spread optimization and event-driven investment opportunities for a given level of risk. Based on in-depth research and using a proprietary valuation model, the portfolio managers continuously compare the levels of remuneration potential available across issuer qualities, countries, interest rates, currencies and maturities within the investment universe to identify the most rewarding opportunities, which may be contrarian to mainstream views. To seize them, the team flexibly adapts the portfolio while keeping credit, interest rate and currency risks in check.
"In emerging market corporates there are always bonds that offer income and capital gains for an active manager who knows where to look."
We take a deeply contrarian approach to emerging market corporate bonds, aiming to take advantage of the dislocation in valuations that often present themselves in this inefficient and news-flow driven asset class.
We take a four-step process, which combines top-down strategic themes and bottom-up analysis with a focus on maximizing credit remuneration. The fund managers deliberately avoid global rates risk and currency risk, instead concentrating on the credit component.
The size of the emerging market corporate debt universe comes as a surprise to many investors. At 2 trillion US dollars, the emerging market corporate bond universe is twice the size of US dollar denominated emerging sovereigns1. With an average rating of BBB-, the credit quality of the corporates is better than their sovereign counterparts1. Also, it is the asset class within emerging market debt with the lowest duration and volatility1. With the multitude of countries, industries as well as unique issuers in different phases of the economic cycle, there is a broad set of opportunities available, providing a combination of favorable yield and income. As the growth differential versus developed markets is increasing in the emerging markets’ favor, this space is set to rise further.
The main story though is the prolific inefficiencies in the emerging corporate bond space, which makes it an active manager’s paradise. We take advantage of these inefficiencies by complementing our tried and tested value-driven strategies with event-driven opportunities. As contrarian, bottom-up investors, we actively seek stories which other managers avoid. What’s more, we exploit the situations that they sometimes provoke! These trades are highly rewarding, truly diversified strategies, but above all, decorrelated from the broader markets because price action is issuer specific. In a nutshell we aim for, pure, uncorrelated and idiosyncratic alpha!
1. Source: J.P. Morgan, as of 31.12.2018
Segmented markets and risk aversion offer high return, low volatility and decorrelated opportunities. Our investment philosophy rests on two inefficiencies and sources of performance:
Senior Portfolio Manager Wouter Van Overfelt, PhD and Portfolio Manager Sergey Goncharov of the 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 Aug 31 2020 unless otherwise indicated.
|Sep 01 2015 - Aug 31 2016||Sep 01 2016 - Aug 31 2017||Sep 01 2017 - Aug 31 2018||Sep 01 2018 - Aug 31 2019||Sep 01 2019 - Aug 31 2020|
|Yield to maturity||13.6%||4.2%|
|Number of positions||210.0||1'640|
|Active Share (country, issuer, ISIN)||42% / 89% / 94%|
|[3 years annualized]|
All data is as at Sep 29 2020 unless otherwise indicated.
|Portfolio Manager||Wouter Van Overfelt|
|Share Class Currency||USD|
|End of fiscal year||31 August|
|Index||JPM CEMBI Broad Diversified|
|Share Class Launch date||Nov 13 2015|
|Swinging single pricing||Yes|
|Fund Registrations||AT, CH, DE, ES, FI, FR, GB, IT, LU, NL, NO, SE, SG|
|Share Class Registrations||AT, CH, DE, ES, FI, FR, GB, IT, LU, NL, NO, SE, SG|
|Highest since launch||169.01|
|Lowest since launch||97.79|
|Fund volume in mln.||USD 1,310.27|
|Share class volume in mln.||USD 690.52|
|TER||0.78% (Feb 28 2020)|
|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|
|Share class||Currency||ISIN||Distrib.||Type||Launch date||Management fee||TER||TER Date|
|A||USD||LU2033400107||Dist||Retail||Aug 29 2019||1.10%||1.37%||Feb 28 2020|
|AQN||USD||LU1914926925||Dist||Retail||Nov 30 2018||0.55%||0.82%||Feb 28 2020|
|B||USD||LU1750111707||Accum||Retail||Jan 19 2018||1.10%||1.37%||Feb 28 2020|
|HI (hedged)||EUR||LU1750111533||Accum||Institutional||Jan 19 2018||0.55%||0.84%||Feb 28 2020|
|HI (hedged)||CHF||LU1923148958||Accum||Institutional||Jan 08 2019||0.55%||0.84%||Feb 28 2020|
|I||USD||LU1305089796||Accum||Institutional||Nov 13 2015||0.55%||0.78%||Feb 28 2020|
|N||USD||LU1750111616||Accum||Retail||Jan 19 2018||0.55%||0.82%||Feb 28 2020|
|S||USD||LU2046631813||Accum||Institutional||Sep 13 2019||0.00%||0.16%||Feb 28 2020|
* TER includes performance fee where applicable
All data is as at Aug 31 2020 unless otherwise indicated.
|12% Aragvi Fin Intl 09.04.2024 Reg-S||2.0%|
|5.375% Peru LNG 22.03.2030 Reg-S Senior||2.0%|
|8.875% Credivalores 27.02.2025 Reg-S Senior||1.9%|
|7.25% Ronesans Gayr 26.04.2023||1.6%|
|7.25% Petra Dmnds US 01.05.2022 Reg-S Senior||1.6%|
|10.75% DTEK Finl 31.12.2024 FRN Reg-S Senior||1.6%|
|7.5% Eterna Capital 11.12.2022 FRN Reg-S Senior||1.5%|
|6.5% Sasol Financing 27.09.2028 Senior||1.5%|
|9.5% Andrade Gut 30.12.2024 Reg-S Senior||1.4%|
|6.35% Eskom Hold SOC 10.08.2028 Senior||1.4%|
|Factsheets & Commentaries|
|Monthly Commentary||Aug 2020|
|Product Flyer||Oct 2019|
|AGM EGM invitation||Jan 2020|
|Articles of Association||Apr 2016|
|Notification to Investors||Apr 2020|
|Sales Prospectus||Dec 2019|
|Annual Report||Aug 2019|
|Dividend Payout||Jan 2019|
|Semi-Annual Report||Feb 2020|
|Holiday Calendar 2020||Jan 2020|
|List of Active Retail Share Classes||Dec 2018|
|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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