Local Currency Bonds EUR Acc
The Structural Investment Case for EM Local Currency Bonds
- Emerging market and Frontier countries generally belongs to the low or middle income parts of the World when measured on GDP per capita.
- Because these countries typically have growing populations and lower capital bases compared to high income countries they tend to grow structurally higher causing their income to converge towards that of more developed countries.
- The current low-yield environment in the developed world amplifies this structural effect. It creates a need for investor diversification that will support long-term demand for emerging debt assets.
- Except for some notable exceptions, emerging market countries are generally fundamentally in good shape with falling levels of inflation, higher credit ratings and improved institutions such as independent central banks.
- In the recent decade, the number of countries with sufficiently developed market structures to open up local currency based debt issues have increased. This gives rise to a new breed of local institutional investors that increase liquidity and offer states an opportunity to fund their budgets without the FX risk associated with USD or EUR denominated debt.
- However, fragile institutions and unsustainable conduct of government can still cause risks to investors and it is therefore Sydinvest considers a significant amount of data on Environmental (E), Social (S) and governance (G) factors (ESG) when constructing the portfolios.
- The emerging debt asset class has more than 18 trillion USD in market cap, but it still only count for approximately 20% of the world’s total GDP thus far below levels found in the developed markets. At the same time, roughly 70% or more of the World’s populations live in the 80 most common emerging market countries. Since only the countries with sufficient institutional strength can issue local currency debt, the case for market expansion and long-term investment opportunities are indeed vast and well founded.
The Sydinvest EM funds and their advisor, the Sydbank EM Debt Team, can be explored in further detail on the eVestment database, a Nasdaq company, that provides a leading cloud-based data platform for institutional investors and their advisors.
On eVestment, Sydbank EM Debt present its leading emerging market strategies and investment capabilities together with other leading investment managers thus allowing our clients a comprehensive global database to monitor our performance and stay informed. In case you require access to the database or further information on the Sydinvest EM strategies not found here, please do not hesitate to contact:
Christian Farø - Senior Institutional Sales Manager
T: +45 74 37 37 22 | M: +45 21 46 79 40 | firstname.lastname@example.org
Kapitalforvaltning | Peberlyk 4 | DK-6200 Aabenraa
Sydbank A/S | CVR-nr. DK 12626509
The Profile for Sydinvest EM Local Currency Bonds
- The fund invest in local currency sovereign bonds issued from emerging market and frontier countries. The objective is to provide investors with excess returns to the benchmark through active portfolio management.
- The fund’s investment philosophy considers that a number of risk premiums emerge from the fundamental and structural case of emerging market convergence.
- Most prominently, the lower level of human development and income cause institutional and market risks that increase the country risk premium. This premium can typically be expressed through inflation risk, trade and current account balance risk as well as government budget funding risk. A thorough evaluation of the growth and debt payment dynamics as well as the sustainability of government is conducted to reveal such opportunities.
- Secondly, the lower market cap of emerging debt issues creates liquidity premiums that can be revealed through a systematic relative value analysis across the investor base, the issuer characteristics and the issuer quality.
- The ongoing dynamics of these risk premiums cause market prices to deviate from their long term fair values. It implies that each emerging market country carries a unique story and that active management is the only way for investors to unlock the value of these opportunities.
- Sydinvest offers investors its decade-long experience of investing into hard and local currency emerging markets with an investment process built a small yet highly efficient and agile team.
Explore the Sydinvest EM Investment Philosophy
Study the details of the Investment Process
Explore Sydinvest EM and the EM Debt Team on eVestment Analytics
Head of EM Debt - joined Sydbank EM Debt in November 2007 from the Danish asset manager Jyske Invest where he managed EM debt hard and local currency portfolios as Senior Portfolio Manager. His investment manager career began back in 1996 where he took management of Sydbank’s Danish fixed income portfolios. In 1998 he moved on to become fixed income analyst at Jyske Bank. In 2001, he assumed the role as Head of Fixed Income in Jyske Invest until 2005 where he decided to focus entirely on EM debt and participate in the launch the firm’s first EM local currency strategy.
Rune Juel Hansen
Senior Portfolio Manager - joined Sydbank EM Debt in October 2007 from the Danish bank Jyske Bank’s Emerging Markets Fixed Income Division where he held a position as Quantitative Analyst. Rune began his career in 2004 in Jyske Bank and worked closely with colleagues Thomas Brund and Phillip Blackwood on the EM debt strategies in Jyske Invest. Their partnership has continued in Sydbank where Rune has held the role as Senior Portfolio Manager covering a number of research responsibilities. Most notably is Rune’s skills in the quantitative research approach where he has made significant contributions to the Team’s Relative Value approach on EM FX and credit, specialist assets and EM Frontier markets.
Jens Erik Boesen
Senior Portfolio Manager - joined Sydbank EM Debt in May 2013 from a position as Senior Risk Analyst with DONG Energy Markets (the Danish national oil and gas exploration and production company) where he had primary responsibility on long term market risks including global macro and FX markets. Before assuming his role with DONG Jens Erik was an economist with the Danish Central Bank’s Market Operations Division, where he managed risk on the Central Bank’s FX Reserves.
Joined Sydbank EM Debt in October 2007 and since 2011 a partner with the Team as Adviser on exclusive basis. Phillip was born in Belfast, Northern Ireland, and lives in London UK since 2011 after spending 11 years in Denmark. In line with Sydbank’s core values of retaining valuable skills and nurse long term partnerships, Phillip has continued his relationship with the team through EM Quest Ltd; an FCA licensed investment advisory firm solely owned by Phillip with Sydbank as the only and exclusive client.
Hans Christian Bachmann
Senior Economist - joined Sydbank EM Debt in 2007 from a position as Macro Analyst in Sydbank Markets where he started in 2004. Hans Christian has spent his entire career with Sydbank in research with a key focus on EM as well as the major Developed World macro economies and has contributed to the Team’s investment process through his development of the fundamental market research and global politics.
Senior Trader - joined Sydbank EM Debt in 2007 from a position as trader in Sydbank Markets where she had been trading EM securities since her career in Sydbank began in 2001. Before assuming her position with Sydbank she held a position as Financial Controller with A.P. Moeller-Maersk from 1998.
Head of Fixed Income Research in Sydbank Asset Management and key responsible for the fundamental quantitative research and data management on all Fixed Income strategies. Claus assumed the role as Head in 2013 coming from a position as quantitative analyst in the same group since 2003 where he worked full time as part of the EM Debt Team from 2007 to 2011.
Quantitative Analyst with Sydbank’s Fixed Income Research, joined Sydbank EM Debt full time in 2011 from a similar position in the same group. He replaced Claus Juhl as the daily 1st contact and works closely with Claus Juhl and the rest of the group’s analysts on the Sydbank EM Portfolio System.
ReturnsDate 03/12/21 16:28
Today's Return: +0.24%
Return Nov.: +0.44%
Return YtD: -0.42%
NAV per. 03/12/21 16:28
|Today's Returns||0.24 %|
|Return year to date, %||-0.42 %|
|Total Assets (m)||2 EUR|
Returns - Last Update 01/12/21
|Return year to date, %||-0.44 %|
|Local Currency Bonds I EUR Acc||Return November||Return YtD|
|Top 10 Holdings||Coupon||Country||Base currency||Proportion|
|JPMorgan Chase Bank NA 08.12.2026||3.12||USA||CNY||7.69%|
|Mexican Bonos 03.06.2027||7.50||Mexico||MXN||5.00%|
|Czech Republic Government Bond 26.06.2026||1.00||Czech Republic||CZK||4.40%|
|ICBC Standard Bank PLC 08.06.2027||2.85||China||CNY||4.25%|
|South Africa Government Bond 31.01.2040||9.00||South Africa||ZAR||4.12%|
|Russian Federal Bond - OFZ 14.03.2029||6.70||Russia||RUB||3.40%|
|Peruvian Gov. 12.08.2032||6.15||Peru||PEN||3.37%|
|Fund Holdings: 54|
|Show all Holdings|
Distribution by country
Potentially lower rewards
Potentially higher rewards
Placement of the fund on the scale is determined by the fluctuations of the funds NAV over the past five years.
Fees and Expenses
Fees and Expenses
|Fees and Expenses||Total Management Fee||ÅOP (Costs)||Indirect Trade Cost||Subscription||Redemption|
|Local Currency Bonds EUR Acc||0.63 %||0.71 %||0.21 %||0.26 %||0.26 %|