Investment Strategy
The Berenberg EM Bonds fund uses an active investment process to invest in attractive government and quasi-sovereign bonds from emerging markets that offer above-average return potential compared to traditional EUR fixed income investments. Using a combination of systematic and discretionary components in the investment process, the fund manager selects bonds from fundamentally convincing emerging markets or government-related companies for the portfolio. The investment strategy is underpinned by ongoing country risk management and active interest rate duration management. The foreign currency risk is generally hedged.
- Fundamental investment approach in government and quasi-sovereign bonds from Emerging Markets with active duration management
- Active positioning against a market benchmark
- Average duration is between 0 and 10 years
- Investment segments are primarily (quasi) government bonds in hard currencies
Learn more about our Berenberg Fixed Income investment philosophy
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Further details on the opportunities and risks of this fund can be found in the sales prospectus.
Indexed performance
Performance in 12-month periods
Currencies
Sectors
Countries
Asset classes
Top Holdings
Monthly market comment
June was a turbulent month, marked by developments in the USA and idiosyncratic issues within emerging markets. On one hand, US economic data confirmed the decline in inflation and a further cooling of activities, reflected in a 10 basis point drop in 10-year US yields. On the other hand, election surprises in Mexico and South Africa, French snap election, and the ongoing military activities at the Gaza front led to a spread widening of 10 basis points in hard currency sovereign space. Over the month, the Berenberg EM Bonds Fund performed negatively. In particular, the spread widening in the B-rating segment, where the fund is overweight, significantly impacted performance. The management further increased the fund's duration and raised the allocation in the investment-grade segment to protect the fund from potential summer volatility.
Portfolio Management
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