Colchester launches EM bond fund
Colchester Global Investors has launched its Emerging Markets Bond fund as a diversifier for financial advisers for the income-generating allocations of their client portfolios.
According to FE Analytics data, the institutional version of the fund has returned 16.8% since its inceptions in December 2017, beating its average global bond sector peers that returned 8.1%.
Colchester Emerging Markets Bond fund performance v sector since fund inception to 16 September 2019
Source: FE Analytics
Colchester head of distribution for Australia, Angela MacPherson, said the fund was not a substitute for developed market sovereign bonds but it offered attractive income, diversification and return characteristics.
“Relative to credit and hedge funds it can offer a liquid and simple alternative that may also have lower default risk; after all local currency emerging markets, as governments, can tax and print money which corporates cannot,” she said.
Colchester said the local emerging market debt index was primarily investment grade quality with over 80% of countries rated BBB- or above and the fund believed that former views of emerging markets being highly volatile was not prevalent today.
It said the markets it invested in had “improved balance sheets, prudent government and fiscal policies, and improving institutional frameworks which were increasingly consigning historical volatility to the past”.
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