Threadneedle Emerging Market Bond Z

US$ denominated fund Investing mainly in US$ denominated emerging market sovereign debt.

  • 99.70p
    Price (Inc)

    These are the shares in the fund that pay out an income to clients. The income is made up of the total dividends – the money a company can pay out to its investors – from the companies in the fund.

  • -
    Price (Acc)

    These are the shares in the fund that don’t pay out an income to clients. Any dividends – the money a company can pay out to its investors – are reinvested into companies in the fund. Despite no income, the shares should be worth more over time. Good incentive, eh?

  • 0.00%

    Initial charge

    Some funds charge you when you first invest, which is aptly known as the initial charge. They’re usually between 3-5% but at Bestinvest, we usually don’t charge you a penny!

  • 0.60%
    Annual management charge

    This is how much the fund management company charges to run the fund. It’s like paying a babysitter, dog sitter or house sitter (that makes well-informed, heavily researched changes to improve your baby/dog/house when needed).

  • 0.73%
    Ongoing charges

    This stands for Ongoing Charges Figure. It’s the cost of running a fund and includes admin fees, manager fees, administration costs, etc.

  • 5.10%
    Yield

    How much the fund is currently paying out in income to investors. It’s NOT to be confused with the overall growth of a fund – a very different thing indeed. It’s also NOT a guarantee of future pay-outs, just a snapshot. This is more what it’s not than what it is…

Prices as at 15 January 2021

This fund invests predominantly in US$ denominated bonds issued by emerging market (ex G7) countries. The fund is structured with reference to the JP Morgan EMBI Global index (an index of sovereign issued external debt). However, the manager also seeks to maximise dollar returns so he can zero weight countries in the index. Country credit worthiness and political risk are key, although allocation between countries is generally a relative value decision. Sterling investors should note that as the base currency for the fund is US$, investors are susceptible to movements in the £/$ exchange rate.

Fund summary

Sector Global Emerging Markets Bond - Hard Currency
Structure OEIC
Launched October, 2012
Size £182m
Yield 5.10%
Charging basis Capital
Dividends paid 7 May, 7 Nov

Charges

Standard initial charge 0.00%
Initial charge via Bestinvest 0.00%
Additional bid/offer spread 0.00%
Annual management charge 0.60%
Ongoing charges figure 0.73%

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Investment process

The process is macro driven with the team making an assessment of the credit worthiness of and the political risks posed by a country. Although this is a benchmark relative product the manager can zero weight countries in the index if he choses to and use cash aggressively if the asset class is unattractive. A quantitative country model drives the macro economic assessment and this is updated quarterly. This helps the manager makes relative value calls between countries and in the past it has helped to signal at risk countries. On a daily basis the manager will often pre-empt the model to take advantage of bond price moves. The assessment of political risks is country specific and is often driven by the judgement and experience of the manager and his team. He will also take advantage of disparities between cash and derivative markets. The fund also has flexibility to hold up to 30% in local currency sovereign debt. Corporate debt is unlikely to be a significant feature of the fund.

Manager research

Average monthly relative returns

  • 16/17 -0.08%
  • 17/18 0.11%
  • 18/19 -0.25%
  • 19/20 0.00%
  • 20/21 0.00%

Bestinvest MRI

  • 3 years 0.00%
  • 5 years 0.00%
  • Career -0.29%
  • 3 years 0.00%
  • 5 years 0.00%
  • Career 4.60%

Performance figures are based on the average of monthly percentage returns relative to the benchmark index.

Henry Stipp

Henry Stipp is an Emerging Markets Fixed Income Fund Manager. He joined Threadneedle in 2001 as a strategist and economist for emerging debt markets. He started his career in Brazil in 1991 with CSFB - Garantia at the Open-Market Trading Desk and has also worked for Modal Bank1 initially as a chief economist and then as head of research. Henry also worked as a professor of Macroeconomics at the Catholic University of Rio de Janeiro. Henry holds a BSc in Economics (Catholic University of Rio de Janeiro), a MSc (Distinction) in Macroeconomic Policy in emerging markets (DPPC-UK) and a PhD in Economics (University of London).

Track record

Henry Stipp has 9.8 years experience of managing mutual funds in this sector. Over this period the average monthly return relative to the benchmark index has been -0.29%. During the worst period of relative performance (from March 2012 - March 2020) there was a decline of 35% relative to the index. The worst absolute loss has been 27%.

Periods of worst performance

Absolute -27.00% (July 2019 - March 2020)
Relative -35.00% (March 2012 - March 2020)

About the MRI

Our unique indicator: the Bestinvest Manager Record Index (MRI) measures the likelihood that the fund manager is adding value through their decisions. It is based on their performance record over the course of their career, adjusted for the amount of risk taken. MRI is an important contributor to our fund rating system but it is also vital to take account of qualitative factors. It is also very important to select funds to form a cohesive portfolio with an appropriate overall risk level.

Allocation

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Top 10 holdings

Data accurate as at 31 May 2020

2.7% Qatar(State Of) 3.75% Bds 16/04/30 Usd200000
2.6% Petroleos Mexicanos 6.84% Bds 23/01/30 Usd10000
2.3% Colombia(Republic Of) 3% Bds 30/01/30 Usd20000
2.1% Gov Of United Arab Emirates 3.13% 30/09/2049
2.1% Saudi Government International Bond 3.75% Nts 21/01/55 Usd200000 144a
2% Qatar(State Of) 4% Bds 14/03/29 Usd200000
2% Russian Federation 4.375% Bds 21/03/29 Usd 144a
2% Peru(Republic Of) 2.844% Bds 20/06/30 Usd1000
1.8% Gazprom Pjsc Via Gaz Finance Plc 3.25% 25/02/2030
1.8% Indonesia(Republic Of) 4.75% Bds 18/07/47 Usd200000 144a
Source: Trustnet

Sector breakdown

Government Bonds 43.00%
Energy 17.00%
Government Bonds 13.00%
Basic Industries 9.00%
Cash & Cash Equivalents 6.00%
Utilities 3.00%
Transport 3.00%
Non-Cyclical Consumer Goods 2.00%
Telecommunications 2.00%
Money Market 1.00%

Portfolio

Typically 30-35 holdings. Manager favours liquid issues.

Constraints

Max. fund weighting of 35% in any one country, no minimum.

Key Investor Information

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