Fund Objective

The Fund aims to achieve a total return primarily by way of income with some capital growth.

View on Past Performance

US dollar denominated emerging market (EM) government bonds fell steeply in September amid a resurgence in risk aversion and yield spreads between EM bonds and US treasuries ballooned by over 100bps, reaching the widest point since 2004.We took advantage of the cheaper values to add to exposure in many markets, especially net creditor countries like Brazil and Russia. We increased the fund's weighting in the BBB rating category.Despite ending lower, the fund had a very good month relative to its benchmark, outperforming by almost 2.5%, helped by an overall underweight duration position. Being underweight or with no exposure at all in some of the worst performers, such as the Philippines, Panama, Ecuador, Pakistan and Ghana, proved beneficial. The fund also benefited from its limited exposure to EM corporate bonds - currently around 3.5%.

Future Expectations

We will remain underweight in corporate bonds and look to focus on locally denominated government debt.

Fund Details