Fund Objective

There is no fund objective available from this fund manager.

View on Past Performance

December is often a time of low liquidity in emerging debt markets and this year proved no exception. It appears that neither investors nor traders were willing to express particular views with much conviction, and the market was volatile and traded within narrow ranges.Neither Treasury yields nor spreads moved significantly over the month. The biggest negative contribution to fund performance was our duration underweight. Our exposure to emerging market currencies, which underperformed the resurgent dollar, also had a negative impact.The most important newsflow emanated from the US and suggested that the American economy is, for the moment, sustaining its period of low inflation. Continued strong growth in Asia, excluding Japan, is also significant.

Future Expectations

We further reduced our exposure to corporates, which now account for just 6.5% of the portfolio. There were no changes to the fund's credit rating breakdown. Indeed, we made no significant changes to the portfolio over the month, being broadly content with our overall positioning.The economic outlook for most emerging countries remains good. However, liquidity withdrawal from credit markets is likely to remain a feature for the next two to three months. While country fundamentals remain encouraging, spread levels are not compelling.

Fund Details