The fund aims to provide a combination of capital growth and income that is higher than the hard currency emerging market bond market over any three-year period.
Investment policy and strategy
Core investment: At least 80% of the Fund is invested, typcially directly, in bonds issued by emerging market governments and government-related institutions, which are denominated in the currencies of developed countries such as the US dollar, euro, yen and sterling.
Other investment: The fund may invest in bonds issued by emerging market companies or bonds issued in emerging market currencies, including Chinese bonds denominated in Renminbi. The fund may also invest in other funds and cash or assets that can be turned into cash quickly.
Derivatives: The fund may invest via derivatives and use derivatives with the aim of reducing the risks and costs of managing the fund.
Strategy in brief: The fund has a flexible investment approach which begins with an analysis of the global economy. Within this framework, the investment manager’s approach involves forming a view on the economic outlook, identifying countries with solid fundamentals and evaluating the quality of individual bonds. This disciplined, multi-pronged approach provides the basis for the fund’s asset allocation, country and currency weighting, as well as selection of bonds.
Performance comparator: The fund is actively managed. The JPM EMBI Global 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.
The fund can be exposed to different currencies. Movements in currency exchange rates may adversely affect the value of your investment.
The fund may invest in China A shares. Investments in assets from the People's Republic of China are subject to changeable political, regulatory and economic conditions, which may cause difficulties when selling or collecting income from these investments. In addition, such investment is made via the 'Stock Connects' systems, which may be more susceptible to clearing, settlement and counterparty risk. These factors could cause the fund to incur a loss.
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 hedging process seeks to minimise, but cannot eliminate, the effect of movements in exchange rates on the performance of the hedged share class. Hedging also limits the ability to gain from favourable movements in exchange rates.
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.
The Fund allows for the extensive use of derivatives.