Objective
The fund aims to provide a combination of capital growth and income that is higher than the global emerging markets bond market over any three-year period.
Investment policy and strategy
Core investment: At least 80% of the Fund is invested in bonds issued by the governments, government-related institutions or companies of emerging markets, which can be denominated in any currency. The fund invests in bonds of any credit quality and may invest up to 100% in lower quality bonds. The fund may invest in Chinese bonds denominated in Renminbi.
Other investment: The fund may invest in asset-backed securities, contingent convertible debt securities, other funds, and cash or assets that can be turned into cash quickly.
Derivatives: The fund may invest via derivatives and use derivatives with the aim of reducing the risks and costs of managing the fund.
Strategy in brief: The investment manager selects investments based on an assessment of global, regional, and country-specific macroeconomic factors, followed by in-depth analysis of individual bond issuers.
The fund is diversified by investing in a range of bonds across emerging markets, globally.
Performance comparator: The fund is actively managed. A composite index comprising 1/3 JPM EMBI Global Diversified Index, 1/3 JPM CEMBI Broad Diversified Index and 1/3 JPM GBI-EM Global Diversified Index is a point of reference against which the performance of the fund may be measured. These indices represent the emerging market government bond markets denominated in the currencies of developed countries, the emerging market corporate bond markets denominated in the currencies of developed countries and the emerging market government bond markets denominated in local currencies, respectively.
Risks associated with the fund
The value and income from the fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise. There is no guarantee that the fund will achieve its objective and you may get back less than you originally invested.
Investing in emerging markets involves a greater risk of loss due to greater political, tax, economic, foreign exchange, liquidity and regulatory risks, among other factors. There may be difficulties in buying, selling, safekeeping or valuing investments in such countries.
Investments in bonds are affected by interest rates, inflation and credit ratings. It is possible that bond issuers will not pay interest or return the capital. All of these events can reduce the value of bonds held by the fund.
The fund can be exposed to different currencies. Movements in currency exchange rates may adversely affect the value of your investment.
The fund may use derivatives to profit from an expected rise or fall in the value of an asset. Should the asset’s value vary in an unexpected way, the fund will incur a loss. The fund’s use of derivatives may be extensive and exceed the value of its assets (leverage). This has the effect of magnifying the size of losses and gains, resulting in greater fluctuations in the value of the fund.
The hedging process seeks to minimise, but cannot eliminate, the effect of movements in exchange rates on the performance of the hedged share class. Hedging also limits the ability to gain from favourable movements in exchange rates.
In exceptional circumstances where assets cannot be fairly valued, or have to be sold at a large discount to raise cash, we may temporarily suspend the fund in the best interest of all investors.
The fund could lose money if a counterparty with which it does business becomes unwilling or unable to repay money owed to the fund.
Further details of the risks that apply to the fund can be found in the fund's Prospectus.
Other information
The Fund allows for the extensive use of derivatives.