Investment
Colchester launches new fund

Colchester Global Investors has launched its new Emerging Markets Bond Fund for financial advisers to diversify within the income-generating allocations of client portfolios.

Colchester's head of distribution for Australia, Angela MacPherson, said: "Relative to credit and hedge funds it can offer a liquid and simple alternative that may also have lower default risk; after all local currency emerging markets, as governments, can tax and print money which corporates cannot."

Colchester said the fund is not intended to act as a substitute for developed market sovereign bonds but said it does offer attractive income, diversification and return characteristics.

"Colchester has a 10-year track record that demonstrates our ability to meet our objectives in emerging markets, our institutional clients have been increasingly allocating to this sector and have provided a cornerstone investment into our fund," MacPherson said.

Colchester said the local emerging market debt index was primarily investment grade quality with over 80% of countries rated BBB- or above.

Adding that the emerging markets it has invested in have prudent government and fiscal policies and improving institutional frameworks which are increasingly consigning historical volatility to the past.

"They are broadly characterised as having contained inflation, limited current account deficits, larger international reserves, are net exporters of capital, borrow in domestic currency which provide longer term and local buyers, and flexible exchange rates," Colchester said.

The fund was awarded a "Recommended" rating from Zenith in August this year, stating it demonstrated proficiency in outperforming across a range of market conditions.

Read more: Colchester Global InvestorsAngela MacPhersonZenith
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