Article date: 16 January 2007
Morley Fund Management via Aviva Fund Services has launched theAviva Morley Emerging Markets Local Currency Bond Fund targeted atEuropean and UK institutional and retail investors*.
The fund aims to capitalise on narrowing yield spreads betweenlocal currency emerging market bonds and the developed bondmarkets.
The fund manager, Kieran Curtis believes that investors’interest is shifting towards investing in local market currency asthis sector still offers high real returns.
“Supply of dollar and euro denominated government debt hasfallen leading to yield compression and this has caused investorinterest to shift. Demand for local currency bonds is strong andgrowing. This is fast becoming a new global asset class.
“I believe investing in local markets offers investorsattractive high nominal and real yields with opportunity forcurrency appreciation. This fund is designed to provide investorswith access to fixed income duration with high potential returnsthat are not correlated with traditional fixed income and equitymarkets thus diversifying risk,” he said.
The rationale behind the fund is reinforced by recent industryresearch. A survey conducted by Emerging Markets Traders Association** showed thatcountries with improved economic fundamentals, which have allowedthem to build up significant financial cushions against externalshocks, have been issuing more local-currency debt while decreasingtheir reliance on foreign-currency bond issues.
Commenting on the research, fund manager Kieran Curtis said over60% of trades now occur in local currency and issuance reflectsthis shift also.
Benchmarked against the JPM GBI-EM Broad Diversified Index, thefund aims to achieve capital growth and income by investing inlocal currencies and bonds of issuers in emerging markets.
Commenting on the launch Mark Watts head of global fixed income atMorley, said: “This further underlines Morley’scommitment to introducing innovative funds to the market place. TheAviva Morley Emerging Markets Local Currency Bond Fund adds toMorley’s strong product stable and good track record alreadyachieved in Emerging Market debt and Emerging Market equityfunds.”
The fund is a sub-fund of the Luxembourg domiciled Aviva MorleySICAV and is available for sale in the UK and other Europeancountries.
* The distribution and offering of shares in the AvivaMorley SICAV may be restricted by law in certain jurisdictions.Copies of the Prospectus and Report & Accounts are availablefree of charge from Morley Fund Management or from the Luxembourgoffice of Aviva Fund Services. The value of an investment in theFund and the income from it can go down as well as up, and canfluctuate in response to changes in exchange rates. Investors maynot get back the original amount invested.
** The Emerging Markets Traders Association research
is available from http://www.emta.org/ndevelop/
For more information contact:
Morley Fund Management
Telephone: 020 78098125
Notes to editors:
Morley Fund Management
Morley Fund ManagementLimited is the UK-based asset management business of Aviva plc.Firms within the Morley group of companies manage £162bn or€239bn from offices around the world as at 30 September2006.
Morley manages both institutional and retail funds. It also acts asinvestment manager for a range of retail investment funds, marketedin the UK under the Norwich Union brand and in Europe under theAviva brand.
- Equity End User of the Year – Derivatives WeekDEAL Awards 2006
- Property Fund Manager of the Year, Pensions Management Awards2006
- Best Commitment to Raising Standards of Trustee Education,Engaged Investor Awards 2006
- Property Fund Manager of the Year, Property Week Awards2006
- SRI Provider of the Year, Global Pensions 2006
- Central European Property Awards 2005 - Outstanding Company ofthe Year & Investor of the Year
- UK Pensions Awards 2005 – Property Manager of theYear
- Property Week Awards 2004 – Best Property FundManager
- Pensions Management Provider Awards 2003 – Best PropertyFund Manager.
Further information about Morley Fund Management can be found atwww.morleyfm.com