The onshore Aberdeen Emerging Markets Bond Fund is based on the offshore Aberdeen Global emerging markets bond fund and will be managed from London by Aberdeen¹s emerging market debt team led by Brett Diment. The fund aims for income and growth, with the flexibility to invest in government and corporate bonds denominated in dollars and in local currencies. It has an initial target yield of 6 to 6.5 per cent and Income will be distributed monthly.
Aberdeen sees emerging market debt as a diversifier that is attractive relative to fixed income in developed markets. The company says there are country and company specific risks, but feels its on the ground research and investment process should identify both the risks and opportunities.
Emerging market debt has become popular over the last six months as investors have taken on board the long-term growth potential andimprovements in emerging markets. Aberdeen¹s emerging markets experience is a plus but Investec¹s emerging market local currency debt fund is a strong performer that could provide competition.
The Aberdeen high yield bond Fund is based on the offshore Aberdeen Global high yield bond Fund and is managed by the London-based high-yield bond team led by Paul Reed. It aims for monthly income with the potential for long-term growth by investing in a portfolio of European bonds including the UK. The initial target yield is 8 to 8.5 per cent.
Aberdeen feels the high-yield bonds will remain attractive to investors looking for income given the low interest rate environment. It expects thecoming year to provide high income and modest capital growth with defaults remaining low. However, the asset class has become very popular and some commentators feel a correction in prices is imminent.