While Edwards said part of the attraction was the growing significance of emerging markets, both by size of global universe and the breadth of interesting opportunities available, especially given the low yields still on offer from developed market fixed income.
As inflation and interest rates are now poised to start coming down – especially in Latin America, as well as various structural reform programmes starting to take hold across various emerging markets, changing governments and attitudes to fiscal policy the opportunity set is vast, varied and ripe for new entrants.
While Edwards and Bhatti may be hoping to follow in the footsteps of L&G Emerging Markets Government Bond Local Currency Index Fund, which has grown from £231.46m three months ago to £288.28m today, or M&G Emerging Markets Bond, whose fund has moved from £304.71m to £339.74m over the period, according to FE.
Others have been less fortunate. Investec Emerging Markets Local Currency Debt Fund has almost halved in three months, shrinking from £516.22m in size to £292.93m today. First State has also almost halved in size as it moved from £116.57m to £75.79m in assets.
With global growth picking up in many cases, the recovery in commodity markets, several emerging markets are now recovering in line with that, having been hit pretty hard in the past couple of years.
As much of Latin America, for instance, approaches the rate-cutting phase of the interest rate cycle, Edwards says: “I think now is as good a time to launch as any.”
