New fund offers an alternative to benchmark-relative investing, managed by GMO’s deeply experienced EM Debt team
GMO, a global investment manager known for its long-term, valuation-oriented strategies, announced the launch of the GMO Emerging Markets Debt Total Return Fund (GMVJX). The Fund builds upon the more than 30-year track record of the GMO Emerging Country Debt team, with their long-term, top performance. It integrates GMO’s hard and local debt capabilities1,2 in a mutual fund format focused on a specific return objective that isn’t anchored to benchmark composition.
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The GMO Emerging Markets Debt Total Return Fund is a natural extension of the team’s unique investing style. The Fund will seek to achieve a return in excess of Secured Overnight Financing Rate (SOFR)+3%, rather than returns relative to hard currency or local currency benchmarks.
“As one of the earliest dedicated investment managers in the asset class, we are excited to expand our differentiated emerging debt offerings to include a Total Return fund,” said Tina Vandersteel, Portfolio Manager and Head of GMO’s Emerging Country Debt Team. “Benchmark-relative investing isn’t for everyone, particularly when benchmarks can be volatile or their characteristics and valuations change over time. Given our alpha-oriented, valuation-based style, we’re comfortable reframing the problem around outcomes. SOFR+3% is a useful outcome for a broad client audience.”2
The GMO Emerging Country Debt team, founded in 1994, is composed of sovereign, corporate, local market, and security relative value specialists with significant experience in the asset class. Reflective of the broadest opportunity set, the team has skills across the credit spectrum, including distressed and defaulted issuers, as well as local markets experience that spans core and frontier local markets3. Unique among peers, the team emphasizes security selection alpha more prominently, approaching country, currency, and interest-rate market selection in more relative value terms with tighter risk control parameters. The team manages $10 billion across benchmark-relative and absolute return strategies.
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