BL Bond Emerging Markets Euro
Bond funds
Data as of 19/08/2019
Risk level
| Low |  | High |
Recommended investment horizon : > 3 years Performance
Average annual performance since launch -1,33 %
Performance as at 19/08/2019
Composition
| Asset breakdown |
| Bonds | 99,64 % |
| Cash | 0,36 % |
| Breakdown by currency |
| EUR | 99,65 % |
| USD | 0,35 % |
| Main positions |
| Peru 2015 2.75% 30-01-2026 2,75 30/01/2026 | 2,51 % |
| Corporacion Nacional Del Cobre De Chile 2014 2.25% 09-07-2024 2,25 09/07/2024 | 2,35 % |
| South Africa 2014 3.75% 24-07-2026 3,75 24/07/2026 | 2,35 % |
| Peru 2016 3.75% 01-03-2030 3,75 01/03/2030 | 2,27 % |
| CNRC Capital Ltd 2016 1.871% 07-12-2021 1,87 07/12/2021 | 2,23 % |
Strategy
Investment objective and policy
The fund invests in bonds (sovereign/quasisovereign/parastatal) of emerging market countries. It also invests in bonds of industrialised countries (issued in emerging market currencies)and to a lesser extent in corporate bonds (of emerging market and industrialised countries). The fund is denominated in euros; the fund's investments are principally in euros and US dollars as well as local currencies. The fund's objective is to generate regular income.
Management report - 2d Quarter 2019
In the second quarter of the year, emerging market debt posted a gain of nearly 2.91% according to the JPMorgan Euro EMBI Global Diversified index. This corresponds to a decrease in the blended yield, which reflects a yield of 1.84% at the end of June compared to 2.09% at the end of March. The second quarter of 2019 was punctuated with significant geopolitical developments which weighed on investor sentiment and global trade. The advent of a multipolar world is redefining investment strategies. One outcome of this multipolarity is the direct impact of bitter trade tensions and the contraction of Chinese manufacturing on the slowdown of emerging market growth. In this macroeconomic context, Thailand and Korea, which are at the epicentre of the trade war, are seeing a drastic decline in exports. Despite this negative global environment, the systemic risk for emerging markets is low and they continue to enjoy accommodative monetary policies and fiscal measures to support the cycle. However, some countries like Turkey and South Africa have limited flexibility for a counter-cyclical policy. In addition, as we said in our March report, the monetary authorities' normalisation process has been interrupted, although there was no official interest rate change in the second quarter of 2019. Lastly, the G20 held in Osaka (Japan) on 27 and 28 June seems to have partially and temporarily reconciled China and America at a time when the tensions were at their most intense. Nevertheless, as we have seen before, the recent truce in the US-China trade spat could rapidly deteriorate. On top of this are the uncertainties surrounding the UK's future position on the European and global scene. Investors no longer know what adjectives to use to define Brexit which is becoming more of a certainty now that the pro-Brexit Boris Johnson is set to succeed Theresa May. In this context, the relative performance of the emerging market economies will be reflected by positive idiosyncratic factors reinforced by a closed economy and underpinned by significant foreign exchange reserves. Hence, although Indonesia or Russia are underpinned by solid local fundamentals, low sensitivity to the trade war or, in the case of Russia, significant international reserves, Chile or South Africa will be more affected in the medium term. Finally, the markets are expecting the Fed to cut interest rates in July with 100% probability. It is therefore likely that bond yields will go down before the end of the next quarter.
General information
| Net Asset Value |
| Calculated | Every business day |
| NAV class B capitalisation shares (19/08/2019) | 92,15 USD |
| CODES | Internal capitalisation code : 16624031
ISIN capitalisation code : LU1008595487
WKN capitalisation code : A1XBE5
|
| Net assets (million) | 258,71 USD |
| Launch date | 28/03/2014 |
