Local Currency Bonds I EUR Acc
Emerging Markets
-1.7 %
Per 18/04/24 16:31
LOW RISK
HIGH RISK
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DK0060646636
0.64 %
Profile
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 | christian.faroe@sydbank.dk
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
Meet the team behind it
Those who manage your investment
Read more
Thomas Brund
Head of EM Debt
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
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
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.
Phillip Blackwood
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
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.
Anette Melchiorsen
Senior Portfolio Manager
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.
Claus Juhl
Head of Fixed Income Research
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
Thomas Rytter
Quantitative Analyst
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.
Returns (according to costs)
Returns
Per 18/04/24 16:31Today's Return +0.14 %
Return Mar: +0.12 %
Return YtD -1.70 %
NAV per. 18/04/24 16:31
| Today's Return | 0.14 % |
| Return year to date, % | -1.70 % |
| Sell | 1857,60 |
| Buy | 1869,20 |
| NAV ultimo | 1863.47 |
| Total Assets (m) | 2 EUR |
Returns - Last Update 01/04/24
| Return year to date, % | 0.03 % |
| 1 Year | 7.00 % |
| 3 Years | 7.01 % |
| 5 Years | 7.43 % |
| 7 Years | 3.90 % |
| 10 Years | 23.10 % |
Latest trends
| Local Currency Bonds I EUR Acc | Return March | Return YtD |
|---|---|---|
| Latest trend | 0.12 % | 0.03 % |
| Return benchmark | 0.12 % | 0.07 % |
Fund Holdings
Fund Holdings
| Top 10 Holdings Securities | Coupon | Country | Base currency | Proportion |
|---|---|---|---|---|
| Malaysia Government Bond 15.06.2028 | 3.73 | Malaysia | MYR | 6.62 % |
| Brazil Notas do Tesouro Nacional Serie 01.01.2029 | 9.76 | Brazil | BRL | 6.04 % |
| Mexican Bonos 13.11.2042 | 7.75 | Mexico | MXN | 4.64 % |
| Malaysia Government Bond 05.07.2034 | 3.83 | Malaysia | MYR | 4.41 % |
| Brazil Notas do Tesouro Nacional Serie 01.01.2031 | 9.76 | Brazil | BRL | 3.84 % |
| South Africa Government Bond 31.01.2040 | 9.00 | South Africa | ZAR | 3.66 % |
| Indonesia 15.03.2034 | 8.38 | Indonesia | IDR | 3.49 % |
| Mexican Bonos 03.06.2027 | 7.50 | Mexico | MXN | 3.45 % |
| Thailand Government Bond 20.06.2031 | 3.65 | Thailand | THB | 3.40 % |
| International Bank for Reconstruction & 17.04.2030 | 6.50 | SupraNational | INR | 3.30 % |
| Fund Holdings: 59 | ||||
| Show all | ||||
Distribution by country
Distribution by country
| Country | Proportion | Change (%-Points) |
|---|---|---|
| Malaysia | 12.11 % | -0.30 % |
| Brazil | 11.42 % | -0.14 % |
| Mexico | 10.76 % | -0.56 % |
| Indonesia | 9.97 % | 0.04 % |
| SupraNational | 8.68 % | 4.60 % |
| Thailand | 8.02 % | -2.66 % |
| South Africa | 7.31 % | -1.00 % |
| Poland | 6.65 % | 0.16 % |
| Colombia | 5.66 % | 0.09 % |
| Other | 19.43 % | -0.50 % |
Distribution by region
| Region | Proportion |
|---|---|
| Asia | 37.39 % |
| Latin America | 31.01 % |
| Eastern Europe | 18.76 % |
| Africa | 10.52 % |
| Caribbean | 0.52 % |
| Other | 1.80 % |
Distrubution by currency
| Base currency | Proportion |
|---|---|
| Malaysian Ringgit (MYR) | 12.02 % |
| Mexican peso (MXN) | 11.41 % |
| Brazilian real (BRL) | 11.23 % |
| Indonesian Rupiah (IDR) | 10.79 % |
| Polish zloty (PLN) | 8.66 % |
| THB | 7.93 % |
| South African rand (ZAR) | 7.31 % |
| Colombian peso (COP) | 5.87 % |
| INR | 5.19 % |
| CZK | 4.57 % |
| Other | 15.01 % |
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Risk
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Risk Scale
Placement of the fund on the scale is determined by the fluctuations of the funds NAV over the past five years.
Duration
Distribution by issuer
| Distribution by issuer | Proportion |
|---|---|
| Mortgage bonds | 0.00 % |
| Government bonds | 95.70 % |
| QUASI-soverreign | 0.84 % |
| Company | 1.39 % |
| Cash | 2.07 % |
Rating Distribution
| Rating Distribution | Proportion |
|---|---|
| BBB- og højere | 57.21 % |
| BB- til BB+ | 15.82 % |
| B+ eller lavere | 24.90 % |
| Average rating | BBB |
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Fees and Expenses
Fees and Expenses
| Fees and Expenses | Running approx. | Indirect Trade Cost | Subscription | Redemption |
|---|---|---|---|---|
| Local Currency Bonds I EUR Acc | 0.64 % | 0.33 % | 0.31 % | 0.31 % |
Documents
Key Information
Key Information per. 31/3-24
| ISIN | DK0060646636 |
| Danish VP Code | 6064663 |
| Inception of Share Class | 21.09.2015 |
| Benchmark | GBI-EM GLO Diversified unhedged/EUR |
| Listed | No |
| Accumulated | No |
| AGM (annual general meeting) | 22.03.2024 |
| Rec. investment horizon | Min. 4 years |
| Portfolio Manager | Sydbank EM Debt Team |
| Base currency | EUR |
| Expected annual costs | 0.64 % |
| Indirect Trade Cost | 0.33 % |
| Share Class Assets (m) | 2 EUR |
| Total Assets (m) | 44 EUR |
| Denomination | 1000 |
| Tax rate 2023 | 1895.63 EUR |
| NAV ultimo March 2024 | 1896.22 |
| Tax Rate | - |
| Fund Holdings | 59 |
| Income type | Capital income |
| Taxation | Stock taxation |
| Dividend (2022) | - |
| Year to Date | 0.03 % |
| Deviation + (1 year) (per. 27/3-24) | 4.68 |
| Deviation + (3 years) (per. 27/3-24) | 6.21 |
| Sharpe Ratio (3 Years) (per. 27/3-24) | 0.14 |
| Yield to Maturity | 7.47 % |
| Average Duration | 5,18 |