First State launches emerging market bond fund

First State Investments has launched an emerging market bond fund for UK and European investors to be managed by Helene Williamson and her emerging market debt team.

The fund aims to combine income and capital appreciation through investments in hard currency debt securities from governments, companies and financial institutions in emerging markets. It will maintain a portfolio of 50 to 120 holdings, mainly in US dollar-denominated debt and will be managed against the JP Morgan EMBI global diversified index.

Williamson commented: “This is a good time to invest in emerging markets debt in our view, given the very low government bond yields in the US and the stronger Eurozone countries, and increasing risks in the European periphery markets. Many bonds offer attractive value as credit spreads have widened substantially and emerging market currencies have cheapened up due to contagion from the crisis engulfing the peripheral countries of Europe”.

First State EMEA regional managing director Gary Withers said: “We believe allocations to this asset class will continue to increase given the diversification and returns it offers. We have an excellent team of investment specialists led by Helene Williamson, who brings with her a wealth of expertise and 30 years of experience in this asset class. Most recently, during her 16-year tenure at F&C, she managed an emerging markets bond fund which achieved a 5-star rating from Morningstar.”