The fund aims to provide a combination of capital growth and income to deliver a return that is higher than that of the global corporate emerging markets bond over any three-year period.
Investment policy and strategy
Core investment: At least 80% of the fund is invested in debt securities issued by companies, including those backed or owned by governments, in emerging markets. These securities are denominated in the currencies of developed countries such as the US dollar, euro, yen and sterling.
No credit quality restriction applies, and the fund may invest up to 100% in lower quality debt securities.
The fund invests in securities that meet the investment manager’s environmental, social and governance (ESG) criteria. Companies deemed to be in breach of the United Nations Global Compact principles and/or involved in defence and weapons are excluded. Investments in companies involved in industries such as tobacco and nuclear power are restricted.
Other investments: The fund may invest in debt securities issued by emerging market governments and government-related institutions denominated in any currency, Chinese bonds denominated in Renminbi, asset-backed securities and contingent convertible debt securities. The fund may also invest in other funds, cash or assets that can be turned into cash quickly.
Derivatives: The fund may invest via derivatives and use derivatives to reduce the risks and costs of managing the fund.
Strategy in brief: The investment strategy is based on an in-depth analysis of corporate bonds, as well as an evaluation of the risks associated with the respective governments. ESG criteria are assessed as part of the credit analysis of bond issuers, and act as an additional filter to the fund’s exclusion policies.
Performance comparator: The fund is actively managed. The JPM CEMBI Broad Diversified Index is a point of reference against which the performance of the fund may be measured.
Risks associated with the fund
The value and income from the fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise. There is no guarantee that the fund will achieve its objective and you may get back less than you originally invested.
Investing in emerging markets involves a greater risk of loss due to greater political, tax, economic, foreign exchange, liquidity and regulatory risks, among other factors. There may be difficulties in buying, selling, safekeeping or valuing investments in such countries.
Investments in bonds are affected by interest rates, inflation and credit ratings. It is possible that bond issuers will not pay interest or return the capital. All of these events can reduce the value of bonds held by the fund.
Investing in bonds from China, denominated in Renminbi and traded on the China Interbank Bond Market, may be subject to greater clearing, settlement and counterparty risk. These factors could cause the fund to incur a loss.
The fund can be exposed to different currencies. Movements in currency exchange rates may adversely affect the value of your investment.
The fund may use derivatives to profit from an expected rise or fall in the value of an asset. Should the asset’s value vary in an unexpected way, the fund will incur a loss. The fund’s use of derivatives may be extensive and exceed the value of its assets (leverage). This has the effect of magnifying the size of losses and gains, resulting in greater fluctuations in the value of the fund.
In exceptional circumstances where assets cannot be fairly valued, or have to be sold at a large discount to raise cash, we may temporarily suspend the fund in the best interest of all investors.
The fund could lose money if a counterparty with which it does business becomes unwilling or unable to repay money owed to the fund.
Further details of the risks that apply to the fund can be found in the fund's Prospectus.