Fixed Income Boutique Emerging Markets Bonds

Vontobel Fund - Emerging Markets Corporate Bond

ISIN
LU2046631813
Valor
49663051

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 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.


Approach

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.

97.90
NAV
-4.69%
Performance YTD
As at Aug 04 2020

Why invest?

  • Multitude of countries, industries and companies offer true diversification to any portfolio
  • Tried and tested value approach offers stable and recurring income, enhanced by specific event-driven stories
  • Deep knowledge of issuers and their decision makers allows us pick bottom-up ideas decorrelated from the broader market and global interest rates

"In emerging market corporates there are always bonds that offer income and capital gains for an active manager who knows where to look."

Wouter Van Overfelt, Senior Portfolio Manager

Our investment process

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.

infograph-product-em-corp_en

Investment opportunity – emerging corporates are a growing asset class

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

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 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.

The fund is trading for less than a year, we can't display performance data.

All data is as at Aug 04 2020 unless otherwise indicated.

Fund data
Portfolio Manager Wouter Van Overfelt
Fund Domicile Luxembourg
Fund Currency USD
Share Class Currency USD
End of fiscal year 31 August
Index JPM CEMBI Broad Diversified
Share Class Launch date Sep 13 2019
Distribution type Accum
Swinging single pricing Yes
Fund Registrations AT, CH, DE, ES, FI, FR, GB, IT, LU, NL, NO, SE, SG
Share Class Registrations CH, LU, SG
Nav Information
Highest since launch 105.97
Lowest since launch 77.31
Fund volume in mln. USD 1,297.38
Share class volume in mln. USD 0.38
Fees And Expenses
Management fee 0.00%
TER 0.16% (Feb 28 2020)
Identifiers
ISIN LU2046631813
Valor 49663051
Bloomberg VNEMSCA LX
WKN A2PQ4F
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 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
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

Regional Exposure

Major bond positions

Bond Allocation
5.375% Peru LNG 22.03.2030 Reg-S Senior 2.2%
12% Aragvi Fin Intl 09.04.2024 Reg-S 2.2%
8.875% Credivalores 27.02.2025 Reg-S Senior 2.0%
7.25% Petra Dmnds US 01.05.2022 Reg-S Senior 2.0%
7.25% Ronesans Gayr 26.04.2023 1.7%
9.5% Andrade Gut 30.12.2024 Reg-S Senior 1.7%
10.75% DTEK Finl 31.12.2024 FRN Reg-S Senior 1.6%
6.35% Eskom Hold SOC 10.08.2028 Senior 1.5%
7% Tullow Oil 01.03.2025 Reg-S Senior 1.4%
5.75% South Africa 30.09.2049 1.4%
Document Date DE EN ES FR IT
Factsheets & Commentaries
Factsheet Jun 2020
Monthly Commentary Jun 2020
Brochures
Product Flyer Oct 2019
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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