Vontobel expands EM bond suite with fixed maturity fund

The Vontobel Fund II – Fixed Maturity Emerging Markets Corporate Bond 2026 fund will offer investors access to short- and mid-maturity emerging market corporate bonds.

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It will hold a fixed maturity of five years and target an average investment-grade rating with a target yield to maturity of 4.7%.

The fund will be managed by Vontobel’s emerging market fixed income team, supported by ESG analysts, and will exclude a range of sectors due to “ESG concerns”.

Available for a management fee of 0.7%, the fund is classified as Article 6 under the EU Sustainable Finance Disclosure Regulation (SFDR).

Sergey Goncharov, portfolio manager at Vontobel, said: “With a predetermined maturity date, the fund’s volatility, credit and duration risk reduces over time.

“This allows investors to participate in emerging markets’ above-average yield opportunities with diminishing risks over the fund’s life span, with the prospect of capital repayment at a fixed date.”

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Rémi Casals, global head of fixed income at Vontobel, added: “In an ongoing low rate environment, clients seek solutions that can meet the need for a higher yield, without taking on unnecessary risk.

“The launch of this fund demonstrates our ongoing commitment to leveraging our proven emerging market fixed income expertise to construct innovative solutions that meet the evolving needs of our clients.”

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