Bestinvest says
The fund provides core exposure to the local currency emerging market debt universe and provides a useful means of generating income and providing exposure to emerging market currencies. The underlying bonds will be susceptible to an increase in emerging market inflationary expectations. A strengthening of sterling relative to these currencies will also have an adverse impact on returns. The strategy targets dollar returns so fluctuations in the £ versus USD may also cause volatility in returns for sterling based investors.
The Fund aims to achieve long term total returns primarily through investment in sovereign bonds issued by emerging market borrowers, which are typically countries that are classified as low or medium income by the World Bank.
This Fund is designed to benefit from the superior performance potential of these bond instruments and the currencies of these less developed economies, many of which are among the fastest-growing. Over the last decade or so the economies of emerging nations have become stronger, with better macro-economic performance and an improved political and institutional environment, consequently in the long term, investors in emerging markets debt should be more than compensated for the extra risk they may take although that's not guaranteed. Portfolio structure is driven by a bottom up relative value focus on credit / currency with a view to maximising US$ returns.