Morley Fund Management via Aviva Fund Services has launched the Aviva Morley Emerging Markets Local Currency Bond Fund targeted at European and UK institutional and retail investors.
Morley Fund Management via Aviva Fund Services has launched the Aviva Morley Emerging Markets Local Currency Bond Fund targeted at European and UK institutional and retail investors*.
The fund aims to capitalise on narrowing yield spreads between local currency emerging market bonds and the developed bond markets.
The fund manager, Kieran Curtis believes that investors’ interest is shifting towards investing in local market currency as this sector still offers high real returns.
“Supply of dollar and euro denominated government debt has fallen leading to yield compression and this has caused investor interest to shift. Demand for local currency bonds is strong and growing. This is fast becoming a new global asset class.
“I believe investing in local markets offers investors attractive high nominal and real yields with opportunity for currency appreciation. This fund is designed to provide investors with access to fixed income duration with high potential returns that are not correlated with traditional fixed income and equity markets thus diversifying risk,” he said.
The rationale behind the fund is reinforced by recent industry research. A survey conducted by Emerging Markets Traders Association** showed that countries with improved economic fundamentals, which have allowed them to build up significant financial cushions against external shocks, have been issuing more local-currency debt while decreasing their reliance on foreign-currency bond issues.
Commenting on the research, fund manager Kieran Curtis said over 60% of trades now occur in local currency and issuance reflects this shift also.
Benchmarked against the JPM GBI-EM Broad Diversified Index, the fund aims to achieve capital growth and income by investing in local currencies and bonds of issuers in emerging markets.
Commenting on the launch Mark Watts head of global fixed income at Morley, said: “This further underlines Morley’s commitment to introducing innovative funds to the market place. The Aviva Morley Emerging Markets Local Currency Bond Fund adds to Morley’s strong product stable and good track record already achieved in Emerging Market debt and Emerging Market equity funds.”
The fund is a sub-fund of the Luxembourg domiciled Aviva Morley SICAV and is available for sale in the UK and other European countries.
-ends–
* The distribution and offering of shares in the Aviva Morley SICAV may be restricted by law in certain jurisdictions. Copies of the Prospectus and Report & Accounts are available free of charge from Morley Fund Management or from the Luxembourg office of Aviva Fund Services. The value of an investment in the Fund and the income from it can go down as well as up, and can fluctuate in response to changes in exchange rates. Investors may not get back the original amount invested.
** The Emerging Markets Traders Association research
is available from http://www.emta.org/ndevelop/
For more information contact:
Beth Saint
Corporate Communications
Morley Fund Management
Telephone: 020 7809 8125
Notes to editors:
Morley Fund Management
Morley Fund Management Limited is the UK-based asset management business of Aviva plc. Firms within the Morley group of companies manage Ł162bn or €239bn from offices around the world as at 30 September 2006.
Morley manages both institutional and retail funds. It also acts as investment manager for a range of retail investment funds, marketed in the UK under the Norwich Union brand and in Europe under the Aviva brand.
Awards
- Equity End User of the Year – Derivatives Week DEAL Awards 2006
- Property Fund Manager of the Year, Pensions Management Awards 2006
- Best Commitment to Raising Standards of Trustee Education, Engaged Investor Awards 2006
- Property Fund Manager of the Year, Property Week Awards 2006
- SRI Provider of the Year, Global Pensions 2006
- Central European Property Awards 2005 - Outstanding Company of the Year & Investor of the Year
- UK Pensions Awards 2005 – Property Manager of the Year
- Property Week Awards 2004 – Best Property Fund Manager
- Pensions Management Provider Awards 2003 – Best Property Fund Manager.
Further information about Morley Fund Management can be found at www.morleyfm.com