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
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
In terms of the still robust US economic data, US Treasuries yields continued to pick up in February, which led to decrease in bond prices. The 10 year Treasury yield increased in the meantime more than 40 basis points higher against end of last month. Similarly, the sovereign bonds from Emerging Market recorded losses on that move. Certain idiosyncratic issues, such as Egypt’s rescue through deals with IMF and the UAE, led to a strong rally in the lower rating segment between B- to CCC. That finally brought a turn of the segment performance this month. The Berenberg EM Bonds fund, which invests in bonds with a minimum rating of B-, was unable to invest in some titles, yet the portfolio management purchased Egyptian bonds punctually. On a monthly basis, the fund performed positive.