NETHERLANDS – ABN AMRO Asset Management today launched a global emerging markets bond fund for euro-denominated investors.
ABN AMRO already has a global emerging market bond portfolio denominated in US dollars that it launched five years ago. This is now 491.4 million dollars in size, and has attracted both US and European institutional and retail investors.
The decision to launch a similar product using the same pool of products but denominated in euros was a direct result of client demand. “With the weakness of the dollar, investors have asked for the same product, but with a hedge into euros,” says Jan Jaap Hazenberg, head of global product development at ABN AMRO AM. The fund will interest those wishing to switch out of the dollar-denominated fund as well as attracting new investors.
In terms of the asset class, ABN AMRO is extremely positive. Raphael Kassin, head of emerging market fixed income, does not think it exaggerated to expect returns of 10% for the rest of the year if no surprises occur. Emerging debt, which has often been considered by investors as too risky, is attracting increasing attention. With economic conditions expected to remain difficult for the next couple of years, equities and corporate bonds looks volatile, and global bond yields are heading towards zero – there are few remaining asset classes that offer value. It is not just a matter of nothing else available, however. Kassin points to fundamentals such as supply and demand and country stability as reasons to invest.
“There has been a run in the market this year, and we expect this rally to continue. Last year there were a lot of complicated fundamentals in some of the countries, such as Ecuador, Turkey and Brazil, but this year is much better,” says Kassin.
The minimum investment will be 250 euros, aiming at both retail and institutional investors. There is only one share class. Fees total 1%.
ABN AMRO Asset Management manages 148 billion euros in assets under management.