Ten year anniversary ERSTE BOND EMERGING MARKETS CORPORATE

The ERSTE BOND EMERGING MARKETS CORPORATE fund celebrates its 10th anniversary. “Since our start in this asset class, the universe of emerging markets corporate bonds has matured noticeably,” says Péter Varga, Senior Professional Fund Manager, Emerging Market Corporates with Erste AM. The expert is convinced that in the future, bonds from companies based in emerging markets (i.e. emerging markets corporate bonds) might even play a bigger role.

“We were one of the pioneering asset managers in this asset class back in the days, but meanwhile the market has quintupled in size. At a volume of USD 1.7 trillion, it almost matches the US high-yield market today.”

Péter Varga, Senior Professional Fund Manager Emerging Market Corporates with Erste AM

An attractive alternative to US high-yield bonds

Emerging markets corporate bonds are an attractive asset class in particular for institutional investors with a longer investment horizon. “Companies based in the emerging markets are significantly less leveraged than companies from the developed world. The average credit rating is in a bandwidth of BBB- to BB+, i.e. at the threshold to the high-yield segment,” explains Varga. However, the aggregate debt load of all emerging markets companies is only half of that of US high-yield issuers. “For issuers, this means: similar yields as in the US high-yield segment at a much lower fundamental risk”, says the expert.

Since the launch of ERSTE BOND EMERGING MARKETS CORPORATE in 2007, Varga and his team have achieved an annualised performance of 6.26%. The fund management team has received numerous awards due to this track record. Assets under management currently amount to EUR 439.95mn (as of 31 July 2017). The fund management team in charge manages about EUR 1.7bn worth of emerging markets corporate bonds (that includes mutual funds and institutional mandates).

 

Calculated according to the OeKB method. The performance data take into account the management fee, but do not take into account the one-off load of up to 3.5% due at the time of issue nor other costs that diminish performance such as account and depositary fees. Past performance is not indicative of the future development of the fund.

Outperformance versus market

By means of cumulative returns, it can be seen that we have been able to generate an outperformance for our clients over nearly all investment periods. The basis for this accomplishment was the consistency in fund management and investment style as well as focus on risk management.

Outperformance during market corrections

One of the compelling features of the fund is the focus on stability. The aim of the fund manager is to avoid losers and to implement a rather conservative investment approach in order to be able to offer a smooth performance path even in erratic markets. By taking a look at the past ten years, it goes to show that strategic, long-term investors benefited most from the management of downside risk. A look at some of the most recent significant market downturns shows that so far we did a good job in achieving this aim. 

On a shopping trip with our fund manager for Emerging Markets

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Disclaimer

This document is an advertisement. All data is sourced from Erste Asset Management GmbH, unless indicated otherwise. Our languages of communication are German and English.

The prospectus for UCITS (including any amendments) is published in Amtsblatt zur Wiener Zeitung in accordance with the provisions of the InvFG 2011 in the currently amended version. Information for Investors pursuant to § 21 AIFMG is prepared for the alternative investment funds (AIF) administered by Erste Asset Management GmbH pursuant to the provisions of the AIFMG in connection with the InvFG 2011.

The fund prospectus, Information for Investors pursuant to § 21 AIFMG, and the key investor document/KID can be viewed in their latest versions at the  web site www.erste-am.com within the section mandatory publications  or obtained in their latest versions free of charge from the domicile of the management company and the domicile of the custodian bank. The exact date of the most recent publication of the fund prospectus, the languages in which the key investor document is available, and any additional locations where the documents can be obtained can be viewed on the web site www.erste-am.com. A summary of investor rights is available in German and English on the website www.erste-am.com/investor-rights as well as at the domicile of the management company.

The management company can decide to revoke the arrangements it has made for the distribution of unit certificates abroad, taking into account the regulatory requirements.

This document serves as additional information for our investors and is based on the knowledge of the staff responsible for preparing it at the time of preparation. Our analyses and conclusions are general in nature and do not take into account the individual needs of our investors in terms of earnings, taxation, and risk appetite. Past performance is not a reliable indicator of the future performance of a fund.

The public sale of shares in the specified fund in Germany was registered with the Federal Financial Supervisory Authority, Bonn, pursuant to the German Kapitalanlagegesetzbuch (KAGB). The payment and information office in Germany is HSBC Trinkaus & Burkhardt AG, Königsallee 21–23, D-40212 Düsseldorf. Orders for the return of shares in the fund(s) can be submitted to the German payment and information office, and share redemption proceeds, any dividends or other payments can be paid out to Shareholders (in cash in the local currency) by the German payment office upon request. In addition, all information required by investors before and after the conclusion of an investment agreement – i.e. the fund terms and conditions, the fund prospectus, the Information for Investors pursuant to § 21 AIFMG, and the key investor document and the annual and semi-annual reports – is available free of charge at the German payment and information office. In Germany, the issue and return prices of shares are published in electronic form on the web site www.erste-am.com (and also at www.fundinfo.com). Any other information for Shareholders is published in the Bundesanzeiger, Cologne.