Swiss & Global Asset Management Ltd, a GAM subsidiary responsible for managing the Julius Baer range of investment funds, announced this week the launch of a new UCITS.
Swiss & Global Asset Management Ltd, a GAM subsidiary responsible for managing the Julius Baer range of investment funds, announced this week the launch of a new UCITS. Entitled the Julius Baer Emerging Markets Inflation Linked Bond Fund, it will aim to provide UK investors with the opportunity to take advantage of inflationary pressures in the Emerging Markets sector by investing in the government bond asset class. It is already valued at USD350million; equivalent to 20 per cent of outstanding inflation-linked bonds issued in the West. Inflation is becoming a key issue with India having recently raised its interest rates to 6.5 per cent, in addition to monetary tightening measures taken by Thailand and South Korea – the latter being one of 10 countries, along with their currencies, included in the emerging market sector. The others include: Argentina, Chile, Brazil, Columbia, Israel, Mexico, Poland, South Africa and Turkey.
The fund will be benchmarked against the Barclays Emerging Markets Government Inflation-Linked Bond Index ex-Argentina and Columbia. Co-fund manager, Alessandro Ghidini (pictured) said that performance of emerging market economies had been remarkable. “Fixed income assets have generated cumulative total returns of 20 to 40 per cent since summer 2007,” said Ghidini, adding that today many emerging market assets look more attractive than ever. To protect themselves against rising prices fuelled by inflation whilst also benefiting from currency appreciation, co-fund manager Bernhard Urech said that one interesting way for investors was “to buy protection via local inflation-linked government bonds”. The new fund is a sub-fund of the Julius Baer Multibond, a Lux-domiciled SICAV.