Threadneedle Emerging Market Local Z

Fund invested in local debt and currencies of emerging markets.

  • 69.39p
    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).

  • 0.83%
    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.

  • 5.80%
    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 local currency denominated bonds issued by emerging market (ex G7) countries. The fund manager seeks to maximise returns against a composite benchmark of 50% ELMI index (short term currency deposits) and 50% GBI EM Index (investable local currency sovereign debt). The manager seeks to maximise returns against this benchmark. He adds value through calls on country credit worthiness, currency and positioning along the yield curve.

Fund summary

Sector Global Emerging Markets Bond - Local Currency
Structure OEIC
Launched October, 2012
Size £73m
Yield 5.80%
Charging basis
Dividends paid 30 Jun, 31 Dec

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 0.83%

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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. The manager will take advantage of disparities between cash and derivative markets. 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.

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Top 10 holdings

Data accurate as at 31 May 2020

7.2% South Africa(Republic Of) 8.875% Nts 28/02/35 Zar1
6.5% Colombia(Republic Of) 9.85% Bds 28/06/27 Cop5000
5.9% Russian Federation Ministry Finance 7.05% Bds 19/01/28 Rub1000
5.5% Peru(Republic Of) 8.2% Bds 12/08/26 Pen1000
3.6% Government Of Thailand 3.3% Bds 17/06/38 Thb1000
3.2% Brazil(Federative Republic Of) 10% Bds 01/01/23 Brl1000
3% Indonesia(Republic Of) 8.25% Bds 15/05/36 Idr1000000
2.9% South Africa(Republic Of) 7% Bds 28/02/31 Zar1
2.9% Gov Of Indonesia 8.75% 15/05/2031
2.6% Czech Republic 2.5% Bds 25/08/28 Czk1000
Source: Trustnet

Sector breakdown

BBB 24.00%
BB 22.00%
BB- 11.00%
A- 10.00%
BBB- 9.00%
BBB+ 7.00%
Money Market 5.00%
AA- 3.00%
Money Market 2.00%
B+ 2.00%

Key Investor Information

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