EI Sturdza Investment Funds has announced the launch of the EI Sturdza Strategic Quality Emerging Bond Fund, managed by Eric Vanraes, head of fixed income investments in the Eric Sturdza Private Banking Group.
The strategy will focus on emerging markets globally, and apply a benchmark agnostic approach seeking total return. This approach is expected to result in a portfolio with lower default risk and lower volatility compared to emerging market benchmarks.
Reasons cited for constructing such a global EM debt portfolio include diversification from traditional fixed income investments, opportunites in spreads relative to US bonds, the impact of reforms implemented by many EM jurisdictions, and lower default rates than in the high yield space.
The portfolio will invest in hard currency bonds, denominated in dollars and predominantly rated BBB+ to BB+. The fund will not invest in local currency debt.
The fund is initially registered for sale in Switzerland, but EI Sturdza has plans to expand its availability to other European markets.