Vontobel Emerging Markets Debt

Investment rationale

This is an actively managed emerging markets hard-currency bond fund designed to achieve the best possible investment returns in USD. It can play the role of a specialist fixed-income allocation for investors seeking exposure to sovereign, quasi-sovereign and corporate debt across emerging markets, rather than a broad all-asset core holding. The product is intended for investors with knowledge and/or experience of these products, a medium- to long-term horizon, and the ability to bear losses up to the amount invested. The I share class (LU0926439729) is reserved exclusively for institutional investors. Its Summary Risk Indicator is 3 out of 7 and the recommended holding period is 5 years, while its distinctiveness comes from spread optimization and event-driven investing across emerging markets and credit ratings, predominantly in hard-currency debt.

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How the strategy works

The fund’s objective is to achieve the best possible investment returns in USD. It mainly invests in investment grade and non-investment grade bonds, notes and similar fixed- and variable-rate debt instruments issued or guaranteed by government, government-related, supranational or corporate issuers, predominantly in hard currencies across emerging markets. Limits include up to 75% in high-yield securities, up to 10% in UCITS/UCIs, up to 10% in CoCo bonds, up to 10% in ABS/MBS, and up to 25% in convertibles and warrant bonds; up to 33% may be invested outside the main investment universe in other asset classes and instruments including equities, money market instruments and bank deposits. The benchmark is the J.P. Morgan EMBI Global Diversified Index, used for performance comparison, while the investment team retains full discretion within predefined limits. The fund may use derivatives for hedging, efficient portfolio management and achieving the investment objective; the share class is reinvesting, and the recommended holding period is 5 years.

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Investment philosophy

• The investment universe spans emerging markets and credit ratings, with a focus on hard-currency bonds, notes and similar interest-bearing securities issued by sovereign and corporate borrowers, alongside government-related and supranational issuers.

• Portfolio construction is based on in-depth research and a proprietary valuation model, with the team focusing on spread optimization and event-driven opportunities for a given risk level.

• The team dynamically adapts the portfolio to changing markets, aiming to seize opportunities and control risk while using the J.P. Morgan EMBI Global Diversified Index as a performance comparison benchmark.

• At 31 August 2026, the portfolio had 268 positions, led by sovereign and quasi-sovereign exposure, with sector weights of 49.6% sovereign, 28.8% quasi-sovereign, 9.6% corporates, 6.6% supranational, 1.0% bond fund and 3.3% cash plus forwards.

• Limits include up to 75% high yield, 10% CoCo bonds, 10% ABS/MBS, 25% convertibles and warrant bonds, 10% UCITS/UCIs, at least 5% sustainable investments, and derivatives may be used for hedging, efficient portfolio management and investment purposes.

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Management team

The fund is managed by Wouter Van Overfelt and Dario Scheurer.

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Distinctive features

The fund offers a broad and diversified emerging markets debt toolkit, investing across sovereign, quasi-sovereign, corporate and supranational issuers while remaining predominantly focused on hard-currency exposure. It combines benchmark awareness with full investment discretion, and the process explicitly targets spread optimization and event-driven opportunities using in-depth research and a proprietary valuation model. At 31 August 2026, the portfolio was diversified by issuer and geography, with 268 positions and regional exposure spread across Latin America, Europe, Africa, the Middle East, supranationals, Asia and North America. Structural features include daily dealing, a reinvesting share class, swing pricing eligibility, Article 8 SFDR classification, and ongoing charges of 0.79% as of 28.02.2026.

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Risks

The product is classified as 3 out of 7 on the Summary Risk Indicator, described as a medium-low risk class, with a recommended holding period of 5 years and no capital guarantee. Risks include market, fixed income, credit, interest rate, liquidity, high-yield, distressed securities, ABS/MBS/CLO, contingent convertible bond, derivative instruments, total return swap, leverage, emerging markets, currency, currency trading, ESG strategy, sustainability and operational risks. These risks are linked to the strategy’s investment in investment grade and non-investment grade emerging markets debt, including specific allocations permitted to high yield, CoCos, ABS/MBS, convertibles and warrant bonds, as well as its use of derivatives. Currency risk remains relevant because the portfolio holds exposures in currencies beyond USD before hedging, although after hedging the portfolio is predominantly in USD.

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Asset manager

The product manufacturer and management company is Vontobel Asset Management S.A., based at 18, rue Erasme, L-1468 Luxembourg. It is part of Vontobel Group. The product is authorized in Luxembourg and supervised by the CSSF. The fund itself is domiciled in Luxembourg and structured as a UCITS umbrella fund, with this strategy as a sub-fund of Vontobel Fund.

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