EUROPE - Denmark's Sparinvest has launched an emerging markets corporate bond fund that will apply the company's 'value bonds' investment strategy.

The fund, a sub-fund of the Sparinvest SICAV, will invest in corporate bonds issued by companies located in emerging markets or with the bulk of their earnings there.

The investment universe will include investment grade, high yield and non-rated corporate bonds, in local and hard currencies.

The benchmark will be the Credit Suisse Emerging Markets Corporate Bond index.

Toke Hjortshøj, co-manager on the fund with lead manager Sune Jensen said "obvious pricing anomalies" represented "obvious investment opportunities" to a value investor.

"In the emerging markets, we find companies that are doing business internationally, using high quality and transparent accounting standards," he said.

"They have similar capital structures to their mature market competitors, but better growth prospects and lower debt burdens."

However, when those companies try to raise finance in the credit markets, they find they must offer higher yields simply because of "where their head office is located".

"That's a situation that will surely change over time - and early investors will reap the rewards," he said.

The Luxembourg-domiciled fund, which offers a euro share class, will carry a subscription fee of as much as 2% and a management fee of 1.25%.
 

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