Investment Strategy
The Berenberg EM Local Bonds fund pursues a global (ex-euro) bond strategy in local currencies that invests in both developed and emerging market bonds and actively manages the weighting of the two segments relative to each other depending on their relative attractiveness. Its primary objective is to benefit from the yield advantage of foreign currency bonds over euro investments and the appreciation of (foreign) currencies against the euro. Using a systematic investment approach, the economically strongest countries are selected, taking into account fundamental, momentum and sentiment indicators. The duration is actively managed at the country level and is generally in the short- to medium-term maturity range.
- Global investment strategy in local currency bonds (ex EUR)
- Active positioning against a market benchmark
- Average duration is between 2 and 5 years
- Investment segments are mainly (quasi) government bonds in local currency
Learn more about our Berenberg Fixed Income investment philosophy
Further details on the opportunities and risks of this fund can be found in the sales prospectus.
Indexed performance
Performance in 12-month periods
Currencies
Sectors
Countries
Asset classes
Top Holdings
Monthly market comment
Political events dominated the EM local currency markets in March. The arrest of the Turkish mayor of Istanbul greatly unsettled investors, causing the currency to lose value due to capital flight and interest rates at the short end to rise sharply. Although the situation calmed somewhat over time, it remained tense, causing Turkish bonds to fall sharply in value in March. For European investors in EM local currency bonds, however, the announcement by the German government regarding a significant increase in government spending was the dominant market theme, as the rise in German government bonds by a peak of 50 bp boosted the euro by several percentage points, causing emerging market currencies to lose a total of 2% against the euro. Driven by the strong euro and the sell-off of Turkish bonds, the fund lost around 2.8% in March. Over the course of the month, portfolio management reduced the risk by reducing the proportion of high-yield currencies and at the same time increasing the proportion of Eastern European currencies, as these are most likely to benefit from a strong euro.
Portfolio Management
Wei Lon Sung
Wei Lon Sung has worked in fixed income portfolio management at Deka Investment since 2018, with a focus on emerging markets. He joined Berenberg in 2023 and contributes his expertise in the fundamental selection of emerging market bonds in local and hard currencies. He holds a Bachelor and Master of Science in Mathematics from Goethe University Frankfurt.
Sebastian Burbank
Sebastian Burbank has been with the company since October 2024. Before joining Berenberg, he worked for 3 years at Deka Investment as a portfolio manager for global bonds and currencies. He focused in particular on local and hard currency bonds in the emerging markets. He holds a Master's degree in Finance from Goethe University in Frankfurt am Main and a Bachelor's degree in Economics from the University of Essen.
