Thames River Capital is to introduce sterling and dollar share classes on its long only Dublin-based...
Thames River Capital is to introduce sterling and dollar share classes on its long only Dublin-based High Income fund, subject to Irish Central Bank approval.
The new share classes will enable the specialist group to widen the appeal of the E43m fund, and should lead to increased sales to UK investors in particular, said Michael Mabbutt, head of emerging market debt at Thames River.
Launched in June last year, the FSA recognised fund invests in dollar denominated bonds issued by emerging market countries. The bonds are then hedged into euros in the financial exchange markets in order to reduce currency risk, for the predominantly European investors.
Investors in the new share classes will still have exposure to the same underlying assets, but will now be able to decide what currency they want exposure to.
By investing in this kind of product, investors have taken enough risk, Mabbutt argued, and don't want the currency risk as well.
Mabbutt said: 'Over the last 10 years, emerging market bonds have averaged 15% total returns per annum. If you had invested in US equities over the same period, the total return available has been 14% per annum. US corporate bonds, in comparison, have averaged total returns of 10% per annum since 1980.'
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