According to the announcement, the funds will invest in Emerging Market debt, including sovereign debt, local currencies and corporate debt – and include what the firm claims is the first dedicated Emerging Market Corporate bond fund in the US, the Ashmore Emerging Markets Corporate Debt Fund. According to the firm, the fund seeks to maximize total return by investing in debt instruments of Corporate issuers denominated in “hard” and local currencies.
The other Ashmore Emerging Markets funds to be offered in the U.S. are:
- Ashmore Emerging Markets Local Currency Fund: seeks to maximize total return by investing in instruments that provide investment exposure to local currencies of Emerging Market Countries. The fund is designed to allow U.S. investors to diversify away from the U.S. dollar into EM currencies.
- Ashmore Emerging Markets Local Currency Bond Fund: seeks to maximize total return by investing in debt instruments of Sovereign and Quasi-Sovereign issuers of Emerging Market Countries that are denominated in the local currency of the issuer. The fund seeks to meet its objective by investing in bonds and other instruments denominated in Emerging Market local currencies, and is designed to allow U.S. investors to diversify away from the U.S. dollar into EM currencies.
- Ashmore Emerging Markets Sovereign Debt Fund: seeks to maximize total return by investing in debt instruments of Sovereign and Quasi-Sovereign issuers of Emerging Market Countries that are denominated in any “hard” currency. According to the firm, the fund currently expects to invest predominantly in bonds issued by Emerging Markets governments that are denominated in US dollars.
- Ashmore Emerging Markets Total Return Fund: seeks to maximize total return by investing in debt instruments of Sovereign, Quasi-Sovereign, and Corporate issuers, which may be denominated in any currency, including the local currency of the issuer. The fund has the ability to invest in bonds denominated in “hard” currencies (i.e. dollar, euro, etc) as well as EM local currencies.
Ashmore has sponsored a suite of Emerging Market (EM) Debt Funds that allows investors to participate in the investment opportunities of emerging market economies, which include potential for currency appreciation and higher yields, relative to their developed market counterparts. According to a press release, the funds “seek to benefit from Ashmore’s deep resources in sovereign and corporate credit analysis as well as the firm’s experience as one of the largest participants in the EM debt market”.
Ashmore’s Funds are registered with the U.S. Securities and Exchange Commission (SEC) under the Investment Company Act of 1940 (“1940 Act Funds”) and will initially be available through an institutional share class. Next year, subject to regulatory approvals, the Ashmore Funds also plan to offer additional retail share classes, which will be offered to investors through private banks and broker/dealers. Ashmore’s track record in emerging markets dates to 1992 when it launched its first pooled fund, according to the firm.
Mark Coombs, Ashmore’s Chief Executive, said: “Ashmore has a diversified investor base by type and geography. Approximately 87% of Ashmore’s assets under management are made up of institutional investors including central banks, public and corporate pensions, and insurance companies. The company has the strategic goal to further broaden its client base, in particular to grow the high-net-worth and retail business by partnering with financial intermediaries like private banks, broker/dealers and other high net worth and retail distributors. Our entry in to the broader U.S. investment market furthers this goal.”
Ashmore focuses on six investment themes being external debt, local currency, equity, corporate debt, special situations (including distressed debt and private equity), and real estate. Ashmore also manages a multi-strategy fund (not generally available to U.S. investors) and several structured products with investment banks. As of 30 September 2010, Ashmore managed approximately $41.6 billion across its six investment themes.