Weltzins-INVEST.
There’s no such thing as a low-interest phase.

Rethinking currencies.

 

Profitable news for anyone who wistfully thinks back to the good old interest rates: high current interest income has not been consigned to the history books! Fixed income-oriented investors can supplement their portfolios with investments in local currencies featuring granular diversification, allowing them to secure the opportunity not only to enjoy above-average distributions and additional upside potential, but also to achieve greater diversification.

 

By investing in local currencies from emerging and frontier markets, investors can participate in comparatively high coupons, secure the opportunity to benefit from potential exchange rate gains and ultimately improve their risk-adjusted returns considerably. When it comes to investing in local currencies, in-depth knowledge of the country concerned, the issuer and the individual trading positions is crucial. What is more, market access in emerging markets is often tricky. This makes reliable reference banks and first-rate bond and currency management all the more important. Anyone looking to achieve substantial ongoing distributions while also being willing to tolerate manageable fluctuations in value should take a look at the market for foreign currency investments with an open mind.

Typical investor objectives.

A high-quality selection and very granular diversification of issuers, currencies and residual maturities allow country, credit and liquidity risks to be reduced significantly. Weltzins-INVEST can meet all of these requirements.

Weltzins-INVEST.

 

Investments in local currencies can pay off: the yield spreads in local currencies are often significantly higher than those for EUR or USD-denominated investments and enable greater returns.

 

Weltzins-INVEST is a global fixed-income fund that makes widely diversified investments in emerging markets, frontier markets and industrialised nations. The focus is on emerging markets and local currency bonds with short to medium maturities. The latter offer more attractive yields than bonds denominated in hard currencies. Weltzins-INVEST is the ideal investment vehicle for participating in these higher risk premiums.

It was designed to offer its investors an alternative featuring a yield pickup. Due to the short average duration and the reduced creditworthiness and credit risks, bonds are generally held to maturity (buy-and-hold approach). Weltzins-INVEST pursues an absolute return approach and is managed independently of a benchmark.

The strategy at a glance.

Significant opportunities

  • Regular returns thanks to an investment in a widely diversified portfolio of fixed-income securities from global emerging markets.
  • Upside potential thanks to improvements in the solvency ratings of bond issuers.
  • Additional opportunities for currency gains thanks to investment in local currency bonds.

Significant risks

  • Price losses due to changes in market interest rates, currency fluctuations and unforeseeable political/economic developments.
  • Declining solvency ratings of individual issuers with subsequent price drops/defaults.
  • Potential price losses due to lack of liquidity in the investment segment.

Tried-and-tested investment process.

 

We use a solid, tried-and-tested process to select the countries, issuers and ultimately the individual stocks, boast global market access and reference banks, and can draw on a high level of expertise in the ongoing management of currency and bond positions.

 

Global, variable-rate and fixed-rate bonds

  • Primarily supranational sovereign and quasi-sovereign issuers
  • Mainly in local currencies

Top-down approach for currency and country analysis

  • Political development and investor friendliness

  • Economic perspectives

  • Deka Country Risk Indicator (rating forecast)

Bottom-up approach for issuer and bond analysis

  • Creditworthiness and liquidity
  • Relative value approach for issues

Diversification and spreading of risk at all levels

  • High degree of granularity
  • “Smart equal weighting” of currencies and bonds
  • Generally buy-and-hold trading costs

Ongoing analysis of

  • Interest rate risks
  • Credit risks
  • Country risks
  • Exchange rate risks
  • Operational risks
  • Liquidity risks

Four arguments for Weltzins-INVEST.

 

Realise a consistently high level of distributions, supplement your core investments and optimise your risk-adjusted return.

 

Excellent with 5 out of 5 stars.


Date as at: April 30, 2019, www.morningstarfonds.de