Aberdeen Standard Investments has announced the launch of its new Emerging Local Debt Fund with the minimum investment of $20,000, following client demand.
It would aim to offer Australian investors access to a meaningful risk premium in a low return environment with higher yields than Australian and global developed-market bonds while emerging market (EM) currencies had been the cheapest since before the 2008 Global Financial Crisis, it said.
“In recent years we have seen increasing demand for EMD [emerging market debt] from investors in Europe and the US as local yields have fallen to historic lows. We are now seeing rates fall to similar lows here in Australia and many investors are now looking for alternative ways to generate investment income,” Aberdeen’s head of global emerging market debt, Brett Diment, said.
“While EMD has traditionally not been on the radar screen of many investors, the attractive relative yields has seen more local investors seeking to understand the asset class and gain exposure. Emerging Market Local Currency Debt is an investment grade asset – the index is rated BBB”.
According to ASI’s managing director, Brett Jollie, exposure to EMD could enhance yield while providing diversification benefits.
“As a global investment house, we are committed to offering a range of diversified solutions to help local investors. This launch is an example of our ability to offer professionally managed solutions that are not easily replicated directly in the local market,” he said.