Monthly Update: Van Eck Unconstrained EMD
Links to the other Candoris Monthlies:

 

Good afternoon,

 


 

Current allocation of the portfolio: 7.5% carry, duration 5.3%, LC exposure as you can see above around 40%. 

 

 


- Presentation Van Eck Unconstrained EMD

- Van Eck Unconstrained EMD versus peers

- Factsheet

- Commentary


- Kiid's

-Webinar Replay of the August VanEck EMD

 

The case for EMD:
 

Global Fixed Income Efficient Frontier 

 


click to enlarge 

 

 

The Unconstrained Emerging Markets Bond Strategy seeks to identify undervalued opportunities through investments in emerging market debt securities issued in both hard and local currencies.
The Strategy was among the first to combine local and hard currency bonds in one unconstrained offering. Van Eck believes an unconstrained approach is important because idiosyncrasies exist, and country and currency selections are imperative. An unconstrained approach allows for tactical shifts based on market conditions. The investment process is based on a proprietary approach to assess an issuer’s ability to meet its debt obligations, seeking to exploit mispricings.

 

Van Eck Unconstrained Emerging Market Debt
 

Composite Data

Fund Facts

 

 

 

 

 

Alpha

0.73%

 

ISIN 

IE00BYXQSF37 

Beta

0.88

 

Benchmark

50% EMBI & 50% GBI-EM

Std Dev

8.22%

 

Currency

USD

UMC

91.56%

 

Bloomberg ticker

VAUMUI1

DMC

88.13%

 

Asset Class

Fixed Income

Information Ratio

0.06

 

Type

Unconstrained

Tracking Error

4.62%

 

Region

Emerging Markets

Sharpe Ratio

0.31

 

Dividend policy

Accumulating

 

 

 

 

 

Data as of 31-1-2020

 

 

 

 

 

 

 

 

 

 

 

Having the mandate to be truly unconstrainedthe possibility to take idiosyncratic positions and completely avoid large benchmark names allows the strategy to be truly active. As you can see in the graph below the strategy had a very low allocation to EMD LC in 2018 (10% at some point). In December the allocation to EMD LC increased to 40% and currently is slightly below 50%. Van Eck’s Unconstrained EMD strategy is a unique as it is truly unconstrained between the sub classes and it uses a unique bottom up approach. 

 

A truly active and unconstrained strategy

 

 

Investment Philosophy

Experienced management: Dedicated management team is led by Eric Fine, who has spent significant time in the emerging markets and has nearly 30 years of emerging markets investment experience as a strategist and portfolio manage
• Bottom up process: Based on a proprietary approach to access an issuer’s ability to meet its debt obligations, the investment process seeks to exploit mispricings and identify undervalued opportunities.
Ability to diversify: Increased ability to diversify exposure by currency, region, credit, maturity, and duration.
Unconstrained strategy: Flexibility to invest across all emerging markets debt components: sovereign and corporates bonds denominated in local and hard currency; our historical allocation demonstrates this approach, as we moved from over 85% local currency to over 90% hard currency exposure over time.

Investment Process – key features of the fund

                                                                                 

Please click here for a more detailed presentation about the Unconstrained EMD strategy.

 

 

 

* Performances are annualised. The latest data is still preliminary. Data quoted is past performance and current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate.. "This email is intended to be reviewed by only the intended recipient and may contain information that is privileged and/or confidential. If you are not the intended recipient, you are hereby notified that any review, use, dissemination, disclosure or copying of this email and its attachments, if any, is strictly prohibited. If you have received this email in error, please immediately notify the sender by return email and delete this email from your system."