Swiss financial group Union Bancaire Privée (UBP) has soft-launched one emerging market bond strategy, the UBAM Emerging Market Sovereign Bond fund on 31 August 2017 and an emerging sustainable corporate bond fund, the UBAM EM Sustainable High Grade Corporate Bond fund, is to be launched by the end of the year, InvestmentEurope can reveal.
Both funds are registered within UBP’s Luxembourg-domiciled UBAM Sicav. This EM push coincides with the arrival of former Nordea’s emerging market portfolio manager Thomas Christiansen as head of EM Sovereign Fixed Income Debt in July 2017, reporting to Denis Girault, head of Emerging Markets Fixed Income at UBP.
The UBAM Emerging Market Sovereign Bond was launched with $72.94m of assets (as of 1 September 2017). It invests primarily in fixed or variable-rate bonds in hard currencies issued by public authorities or quasi sovereigns.
The issuers must be either domiciled in emerging countries, from any country whose underlying is economically linked, directly or indirectly, to an issuer domiciled in an emerging country, or linked to emerging country risks.
Up to 20 % of the fund’s investments may be carried out in emerging countries’ currencies, the fund literature points out.
As for the UBAM-EM Sustainable High Grade Corporate Bond fund, it will invest in emerging markets fixed or variable-rate bonds.
Eligible issuers will have to be rated BBB- at least by one rating agency and an ESG rating from MSCI ESG Research with a minimum BB rating. Also issuers must not carry a red controversy flag by MSCI ESG Research.
Companies will have to be domiciled in emerging countries, domiciled in any country but with an underlying instrument directly or indirectly linked to emerging countries, or firms whose risks are directly or indirectly linked to emerging countries.
Investments of the fund will be made primarily in currencies of the OECD countries. Also the fund will invest in CoCos up to 20%.
UBP had CHF118.9bn (€104.2bn) of assets under management as of end of June 2017.