Vontobel launches EM bond fund with fixed maturities

Vontobel fixed maturity emerging markets fundAsset manager Vontobel has launched an emerging market fund investing in corporate bonds with maturities of five years.

The firm said it was responding to investor demand for income with a predictable credit and duration risk trajectory.

The Vontobel Fund II - Fixed Maturity Emerging Markets Corporate Bond 2026 invests mainly in short and mid-maturity emerging market corporate bonds. The fund aims for an average investment-grade rating and a target yield to maturity of 4.7%.

Vontobel's emerging market fixed income team manages the fund and is supported by ESG analysts. The fund excludes a range of sectors due to ESG factors and is designated Article 6 based on the EU SFDR classification.

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