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
July was a month of two halves. Initially, weaker US labor market and inflation data led to an optimistic sentiment, bolstering hopes for a rate cut starting in September. In the second half, the expected summer lull set in, accompanied by weak sentiment due to the earnings season and falling commodity prices. Over the course of the month, 2-year and 10-year US yields fell by 50 and 37 basis points (Bps), respectively, while yields on EM local bonds declined by 23 Bps. Currencies that had weakened in the previous month, such as the Brazilian real, remained under pressure, causing the Latin American segment of the index to underperform. The Berenberg EM Local Bonds Fund delivered strong absolute performance. In response to the increased likelihood of a Trump victory, the fund management raised its allocation to developed markets.
Portfolio Management
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