Marcelo Assalin, Head of Emerging Market Debt at NN Investment Partners said: “Monetary policies in developed markets are expected to gradually tighten and to potentially impact on returns of fixed income assets.
“Investors who are willing to mitigate such a risk factor will appreciate the Fund’s strategy of providing stable income, with low volatility and low credit risk.”
Demand for emerging market debt remains strong despite interest rate tightening in developed markets, according to a recent survey.
The Fund invests in debt instruments issued in hard currency (denominated in USD) by emerging market sovereign and corporate issuers and has an average duration between one to three years, an average credit rating of investment grade, and an average current yield of close to 4%.
"Yields on emerging market debt offer substantial premiums versus those available on bonds in developed markets.”
The new product will form part of a full range of emerging market debt (EMD) funds offered by NN Investment Partners which has a 25-year long track record in managing dedicated EMD portfolios.
Annemieke Coldeweijer, Portfolio Manager EMD Corporate Debt based in The Hague and Jared Lou, Portfolio Manager EMD Hard Currency based in New York will co-manage the fund, leveraging on the investment capabilities of a 20-people strong, global EMD team which has over US$10 billion in assets under management.
“Emerging markets have undergone dramatic economic improvement over the last quarter-century and today they offer a compelling source of returns for a broad range of investors. Emerging Markets are ‘catching up’ with the developed world and their real GDP growth rates are outpacing developed markets again,” NN Investment Partners said in a statement.
“While standards have improved in emerging markets, global investors still demand higher compensation for investing in them. Yields on EMD therefore offer substantial premiums versus those available on bonds in developed markets.”
NN (L) Emerging Markets Debt Short Duration (Hard Currency) is a sub-fund of NN (L) (SICAV) , established in Luxembourg. NN (L) (SICAV) is duly authorised by the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg.
Selected share classes of the sub-fund are currently registered in Luxembourg, United Kingdom, Germany, Italy, Austria, Sweden, Finland, Denmark, Norway and The Netherlands.