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Key documents
Objective
The BlueBay Emerging Market Local Currency Bond Fund (the Fund) invests predominantly in fixed income securities of emerging market issuers denominated in local currencies. The investment process follows a dynamic approach where fundamental analysis is combined with relative value analysis across FX and local rates. At a top-level the Fund balances our bottom-up convictions in line with the external backdrop to best harness the embedded volatility within local markets.
The Fund is actively managed and its objective is to achieve a total rate of return in excess of the JPM GBI-EM Global Diversified, unhedged in USD. There are no restrictions on the extent to which the Fund's portfolio and performance may deviate from the ones of the benchmark.
Fund specific risks
- At times, the market for emerging market bonds may dry up, which could make it difficult to sell these bonds, or the fund may only be able to sell them at a discount
- There may be cases where an organisation with which we trade assets or derivatives (usually a financial institution such as a bank) may be unable to fulfil its obligations, which could cause losses to the fund
- Investing in emerging market bonds offers you the chance to gain higher returns through growing your capital and generating income. Nevertheless, there is a greater risk that the organization which issued the bond will fail, which would result in a loss of income to the fund along with its initial investment
- Emerging markets may be more volatile and it could be harder to sell or trade these bonds. There may be less government supervision, legal regulation and less well-defined tax laws and procedures than in countries with more developed trading markets. Emerging markets can be particularly sensitive to political instability, which can result in greater volatility and uncertainty, subjecting the fund to the risk of losses
- RBC BlueBay could suffer from a failure of its processes, systems and controls – or from such a failure at an organisation on which we rely in order to deliver our services – which could lead to losses for the fund
This is a marketing communication. There are several risks associated with investing in this product. Please refer to the prospectus of the fund and to the KIID available on this website before making any final investment decisions.
Investment approach
- Independent management of local rates and FX components within the Fund
- Portfolio construction is based on fundamental analysis and relative value trades, with conviction views
- Thorough bottom‐up country analysis while factoring in the macro environment and local market technicals
- Efficient risk management of the aggregate portfolio on multiple levels; by country exposures, factor risks and macroeconomic sensitivities
Market opportunity
Emerging Market local currency benefits from yield premium to developed markets and previous currency depreciations
The number of countries in the benchmark is growing as more emerging market countries rely more heavily on local currency debt to meet their financing requirements
Brent David
BlueBay Senior Portfolio Manager, EM Currency
Brent joined BlueBay Asset Management (which is now part of RBC Global Asset Management) in March 2014 as a BlueBay Portfolio Manager within the Emerging Markets Team specialising in EM local corporate bond portfolios. Brent has been the lead portfolio manager for the EM Local Currency Corporate Debt Strategy from its inception in July 2014. In September 2017, Brent was appointed Senior Portfolio Manager for the EM sovereign local currency portfolios, working closely with the sovereign debt specialists. Prior to joining BlueBay, Brent worked for 12 years on the sell-side, for Credit Suisse, Barclays Capital and Deutsche Bank, in emerging markets as a local currency fixed income, rates and FX trader. He holds a BEng (Industrial Engineering) degree from the University of Pretoria in South Africa.
Gautam Kalani
BlueBay Portfolio Manager and FX Strategist, Emerging Markets
Gautam is a BlueBay Portfolio Manager within the Emerging Markets Team. He joined BlueBay Asset Management (which is now part of RBC Global Asset Management) in July 2018. Prior to joining BlueBay, Gautam worked as an Emerging Markets Strategist at Deutsche Bank (London). He holds a PhD and Master's degree in Economics from the University of Oxford, and a BA in Mathematics and Economics from Amherst College.