Jupiter repositions EMD local currency fund with income focus

Jupiter has taken the decision to reposition this strategy, removing the requirement of the fund’s holdings to be denominated in local currencies and hence broadening the fund’s investment opportunity across the emerging market debt.

Investor Relations Specialist

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Jupiter is pleased to announce the repositioning of the €102m Jupiter Local Currency Emerging Market Debt Fund (ICVC) as the Jupiter Emerging Market Debt Income Fund, reflecting a change in the fund’s investment objective. The repositioned strategy is expected to achieve the highest yield across the Jupiter EMD platform.

While historically local currency debt had offered a higher yield relative to hard currency emerging market debt (EMD), for a higher degree of volatility, local currency yields are now lower than they once were. With this in mind, Jupiter has taken the decision to reposition this strategy, removing the requirement of the fund’s holdings to be denominated in local currencies and hence broadening the fund’s investment opportunity across the emerging market debt spectrum, providing greater flexibility for the fund to generate an attractive yield.

The Jupiter Emerging Market Debt Income Fund has been managed by Jupiter’s Emerging Market Debt team, led by Head of EMD, Alejandro Arevalo, since Jupiter’s acquisition of Merian Global Investors in June 2020.The team, which also includes Fund Manager Reza Karim, Credit Analysts Alejandro di Bernardo and Xuchen Zhang, and Investment Director Matthew Morgan, manages €725m of assets across the EMD spectrum. They believe that a focus on fundamental credit selection, diversification and liquidity are key to achieving superior risk-adjusted returns.

Emerging market debt offers a significant yield premium relative to developed markets. The breakthroughs we have seen with COVID-19 vaccines and their subsequent rollout is even more important for those EM countries that do not have the reserve currencies, deep pockets, and access to credit markets that developed markets enjoy. With yields squeezed across the globe and EMD spreads still playing catch up to developed market fixed income, we believe now is a good time to allocate to emerging markets.

“We believe these changes will help us to achieve a more attractive total return outcome for investors while also providing us with more flexibility to generate a competitive yield for the fund by allocating capital judiciously across the EMD spectrum.”

Alejandro Arevalo, Head of EMD
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Jupiter repositions EMD local currency fund with income focus