Baring Asset Management is to launch an emerging market corporate debt fund, with the aim of maximising total return, through income, capital appreciation and a currency overlay. Barings said that the fund will hold at least 70% of its assets in emerging market debt securities, and can invest in both investment grade and noninvestment grade debt instruments. The fund will be run by Faisal Ali who joined Barings in August 2011, and he commented: “We believe emerging market corporate debt has the potential to offer attractive riskadjusted returns over the medium and long term. This asset class has shown impressive growth over the past decade and today can rightly be considered as an asset class within its own right.”
The fund will be denominated in US dollars and Barings will use a currency overlay programme to enhance returns. Ali said: “We believe most EM currencies should appreciate against developed market currencies over the long term.” As at the end of April 2012, Barings had $16.7 billion invested in emerging markets across equity, fixed income and multi-asset products.