17.02.2014

Investing in debt markets across the world, the WIOF Global Emerging Markets Bond Fund offers investors the chance to take advantage of emerging markets’ fundamental potential and the opportunities of investing in a complete range of sovereign and corporate bonds in hard and local currency.

 

OVERVIEW

The Fund offers exposure to the entire range of global emerging market (EM) debt markets - hard currency sovereign and corporate debt as well as local currency debt in markets in Europe, Asia, Africa, the Middle East and Latin America. Aimed at maximising total investment return, the Fund is ideal for investors interested in specialised capital markets.

 

A GOOD PROSPECT

Attracted by the positive structural and fundamental characteristics of emerging market economies, including, for instance, generally much stronger economic growth and debt-to-GDP ratios, emerging markets are seen by many investors as offering better prospects for returns. The relatively strong debt positions of many emerging markets in comparison to developed states is one of the biggest draws for investors: while the average debt burden of developed markets is above 100% of GDP, the figure in emerging markets is less than 40% of GDP. As Mirko Matic, portfolio manager for the WIOF Global Emerging Markets Bond Fund explains: “Emerging market debt has historically outperformed other fixed income classes and that trend is set to continue due to favourable fundamentals.”

 

RATING STRUCTURE

 

GLOBAL CHOICE

The global nature of the Fund allows investors to take advantage of the positive qualities of diverse emerging market regions to make the best of their investment. Each emerging market region in the Fund’s investment focus has strong fundamentals which underpin its investment opportunities:

 

  • CIS countries still lag far behind their European peers, implying plenty of space for further growth. Other fundamentals in the region underline its attractiveness for investors: projected economic growth rates compare favourably with those of the developed world while the political environment – a significant risk factor for investors in the past - is becoming more stable.
  • Emerging Europe is persistently undervalued to its actual credit ratings and has a firmly-intact growth story which continues to unfold.
  • Latin America’s economic growth is forecast to outstrip that of the US and many other developed economies over the next four years; it remains a region with low public and private debt; favourable demographics are set to keep driving the region’s economic growth story forward as a regional baby boom during the 1990’s guarantees that in the coming decades a high percentage of its population will be working-age consumers with above-average spending power.

 

 

GEOGRAPHICAL ALLOCATION

 

INVESTMENT PROCESS

The portfolio manager employs a complex investment and stock selection process including:

 

  • The use of custom-made portfolio optimization models combining fundamental and quantitative investment strategies
  • Implementation of custom-designed algorithmic trading systems

 

The company also engages in enhanced index tracking portfolio management designed to beat a benchmark or comparative index. This involves:

 

  • Regression analysis
  • Sector weight matching
  • Macroeconomic analysis
  • Sector analysis

 

 

OUTLOOK

Some emerging economies continue to face difficulties as they struggle to improve fundamentals. But in the foreseeable future growth in most emerging economies is still expected to exceed that in the developed world. Moreover, reduced growth expectations could increase the probability of upside surprises in emerging economies.

 

INVESTMENT ADVISER

The Fund’s investment adviser is NETA Capital Croatia d.d. (NCC) - part of the BAB Group and the largest privately owned asset manager in Croatia. NCC has earned a reputation for its innovative asset management concepts and techniques and its expertise in areas from algorithmic to arbitrage trading. Focusing on various asset classes, particularly European frontier markets, NCC is expanding its footprint in the region through its core competencies of corporate finance and discretional portfolio management.

 

IMPORTANT NOTE: This report has been prepared for information only, and it does not represent an offer to purchase or subscribe to shares. World Investment Opportunities Funds (“WIOF”) is registered on the official list of collective investment undertakings pursuant to part I of the Luxembourg law of 17 December 2010 on collective investment undertakings as an open-ended investment company. WIOF believes that the information is correct at the date of production while obtained from carefully selected sources considered to be reliable. No warranty or representation is given to this effect and no liability can be assumed for the correctness or accuracy of the given information which may be subject to change at any time, without notice. Past performance provides neither a guarantee, nor an indication of future performance. Value of the shares and return they generate can fall as well as rise. Currency fluctuations, either up or down, may also affect value of the investment. Due to continuing market volatility and exchange rate fluctuations, the performance may be subject to significant changes over a short-term period. Investors should be aware that shares in the financial instruments entail investment risks, including the possible loss of the invested capital. Performance is usually calculated on the basis of the relevant NAV unless stated otherwise. Performance shown does not take account of any fees and costs associated with subscribing or redeeming shares. It is assumed that all dividends were reinvested. WIOF prospectus is available and may be obtained through www.1cornhill.com. Before investing in any WIOF Sub-fund(s) investors should contact their financial adviser/legal adviser/tax adviser and refer to all relevant documents relating to the WIOF and its particular Sub-fund(s), such as the latest annual report and prospectus that specify the particular risks associated with the Sub-fund, together with any specific restrictions applying, and the basis of dealing. In the event investors choose not to seek advice from a financial adviser/legal adviser/tax adviser, they should consider whether the WIOF is a suitable investment for them.