Vontobel has launched a Luxembourg-domiciled three-year fixed-maturity emerging market bond fund to tap into the prospect of declining US interest rates.
The Vontobel Fund II – Fixed Maturity Emerging Markets Bond 2 invests mainly in emerging market bonds in hard currencies and aims to offer a higher spread, yield and coupon relative to comparable bonds in developed markets.
It also focuses on optimising the level of spread in short-maturity emerging market bonds.
With a fixed maturity of three years, the fund targets an average investment grade rating and a target yield maturity of 7%, depending on market evolution.
The seeding period for the fund began on 2 April and will close on 14 May, which is also the launch date. The fund’s maturity date is 14 May 2027.
Sergey Goncharov, portfolio manager at Vontobel, said: “Choosing a three-year maturity aligns with current market conditions, which are favourable for emerging market bonds. With an expected downward trend in US interest rates, investors have the opportunity for an attractive risk-return ratio over a fixed time horizon, locking in higher yields.”
The fund is registered for distribution in the UK, Austria, France, Germany, Liechtenstein, Luxembourg, Switzerland, Italy and Spain.
