Nikko Asset Management Launches UCITS-Compliant Emerging Markets Fund

Dec 9 2016 | 9:41pm ET

Nikko Asset Management has unveiled a new UCITS-compliant credit fund that will target local currency-denominated emerging markets debt.

The new fund, named the Nikko AM Emerging Markets Local Currency Bond Fund, will be managed by Nikko’s head of emerging markets portfolio management and former BlackRock executive Raphael Marechal, who joined the firm in early 2016, according to Citywire. It aims to achieve a 1.5% return against the JP Morgan GBI-EM Global Diversified Index and will be fairly concentrated with 30-50 positions. 

“The low yield environment worldwide means investors have to be more active in their fixed income portfolio allocation. The growth gap in emerging markets is returning, on the back of sustained reform and consolidation over the past three years, and we believe the fund offers a promising entry,” Marechal told Institutional Asset Manager.

Donald Trump’s election as U.S. president should be seen as an opportunity, Marechal said to Citywire, while any reflationary tendencies that develop will be positive for fiscal spending and thus base metals and commodities.

The new fund is thought to be part of Nikko’s Luxembourg-domiciled SICAV, to which the firm has been adding UCITS-compliant funds recently. Nikko added a global credit fund in August and a Japanese equity fund in February, following the addition of global equity and multi-asset funds in 2015.

Based in Tokyo, Nikko Asset Management managed more than $164 billion in assets under management as of June 30, 2016. 

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