December-January 2016

FUND LAUNCHES: Fund launches review

We profile some of the most interesting fund launches in recent weeks and examine the performance of a product already on the market. EMERGING MARKET debt Kames Capital has extended its fixed income range with the launch of an emerging market bond fund. It will invest mainly in the investment grade debt of sovereigns and corporates, primarily through hard currency. Emerging market bonds will comprise a minimum of 80% of the fund’s portfolio, and 80% of its holdings will be investment grade at a minimum. The fund will aim to outperform the JPM Emerging Market Bond Index. The fund’s base share class will be dollar, but there will also be euro and sterling share classes. The ‘B’ share class has an annual management charge of 0.65%. The fund will be managed by Scott Fleming, who joined Kames Capital as a fixed income portfolio manager from Nuvest Capital in 2013. Alex Pelteshki, formerly of ING bank, will assume the role of support manager. “Currently, all the headlines on EM inevitably focus on the negative stories about a crisis or defaults as cash flows out of the asset class,” says Kames’ head of fixed income, David Roberts.  “Looking beneath those headlines, there is a growing universe of solid investment grade EM issuers which are overlooked. Our fund intends to exploit those opportunities.” Fund company Kames  Capital Fund name Emerging  Market Bond Launch date 29/10/2015 Domicile Dublin Legal structure Ucits Base currency EUR/GBP/USD Fund managers Scott Fleming and Alex Pelteshki GREEN BONDS Allianz Global Investors has launched a ‘green’ bond fund designed to take advantage
of the transition to a low-carbon economy. The fund is co-managed by Hervé Dejonghe and Julien Bras. Both Paris-based fund managers are part of Allianz GI’s socially responsible fixed income portfolio team. The fund’s investment process combines a bottom-up approach based on fundamental, green and ESG analysis, with a top-down overlay focusing on tactical fixed income exposure. The fund is open to both retail and institutional investors and primarily invests in green bonds issued by corporates, governments, supranationals and agencies. Non-green bonds issued by corporates with strong environmental credentials will also be considered for inclusion initially, although Allianz GI intends the fund to be fully comprised of green investments over time, as the market itself expands.  Fund company Allianz GI  Fund name Allianz Green Bond Launch date December 2015 Domicile Luxembourg Legal structure Ucits Base currency EUR Fund managers Hervé Dejonghe and Julien Bras baltic property  East Capital is set to launch its third vehicle for investing in Baltic real estate since 2005: the Baltic Property III fund.  The fund will invest in high-quality commercial properties in retail, office and logistics, in established and sought-after locations such as the Estonian, Latvian and Lithuanian capitals (Tallinn, Riga and Vilnius).  The fund’s term is eight years, with a possible two-year extension. Structured as a specialised investment fund, it will target institutional investors and €100 million. At launch, more than €70 million had already
been committed.  The Baltic real estate market offers an average yield of 7-8%, two to three percentage points higher than in Nordic capitals.  East Capital moved to launch
the fund due to rents fully recovering from their financial crisis nadir, and lending terms from primary banks growing increasingly favourable.  East Capital’s total real estate assets under management stand at around 250,000 square metres, with more than 500 lessees across all three Baltic states. Fund company East Capital  Fund name Baltic Property III Launch date January 2016 Domicile Sweden Legal structure Ucits Base currency EUR Fund manager Patrick Vogel Global emerging Equity Union Bancaire Privée (UBP) has announced the launch of a new global emerging equities fund – UBAM Global Emerging Equity.  It will be managed from UBP’s London offices by a team of three experienced fund managers and utilise a proprietary country allocation model to assess areas of opportunity and optimally manage risk exposures.  The emerging markets sphere contains around 1,000 stocks based in 23 countries, according to UBP, but the fund’s quantitative and qualitative stock selection process screens stocks to narrow the investable universe to 180.  Securities will then be subject to extensive qualitative analysis, with the fund’s managers assessing each stock against a 29-point checklist that considers a range of fundamental factors including corporate governance, business model and growth strategy. UBP has 25 emerging market specialists in Zurich, London, Istanbul, Hong Kong, Taipei and Shanghai who will also contribute to the management of the fund. The fund is registered in Belgium, Finland, France, Gibraltar, Italy, Luxembourg, Spain, Sweden, Switzerland and the UK. Fund company UBP Fund name UBAM - Global Emerging Equity Launch date December 2015 Domicile Luxembourg Legal structure Ucits Base currency EUR Fund manager Mathieu Nègre One year on The Franklin Templeton European Income fund reached its one-year anniversary in November 2015. The aim of the fund is to maximise income and achieve capital growth by investing in equities and long and short-term debt securities in Europe.  The fund’s management team follows a bottom-up, long-term stock-picking philosophy, attempting to identify contrarian opportunities with sustainable returns.  Its portfolio is generally comprised of about 100 stocks. Since launch, the fund has returned 10.5%, outperforming the category average by 3.6% and ranking in the top quartile of the Morningstar EUR Moderate Allocation category. Financial services equities have been a key source of return, with stocks benefiting significantly from the European Central Bank’s quantitative easing programme boosting liquidity. High-yield bonds have also been profitable low-cost plays for the fund, due to widening spreads reducing credit risk. In an environment where fixed income securities typically offer low yields, European investors are increasingly looking to equities for income – and mixed asset funds, which offer a lower-risk means of holding equities, are growing in popularity. Fund company  Franklin Templeton  Investments Fund name FTIF Franklin European Income Fund Launch date 17/11/2014 Domicile Luxembourg Legal structure Ucits Base currency EUR Fund manager David Zahn

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