In August 2015 VTB Capital Asset Management will implement a new investment strategy ¬— Global Emerging Markets Selected Bonds, based on the open-end fund VTB Bonds Plus.
The new strategy is aimed at the preservation and growth of capital investment in US dollars by investing in emerging market Eurobonds.
The choice of investment instruments is based on the level of country risk as well as credit risk, followed by an internal credit analysis of the final selection of issuers. To assess country risk a multivariable model will analyze the key macroeconomic characteristics of each country. The assessment of credit risk includes, among other things, requirements for the structure and volume of the bond issue, restrictions on the minimum credit rating of the issuer, restrictions limiting the duration and level of debt, and other financial metrics.
The new strategy is designed for retail mutual funds, betting on the preservation and growth of capital investment in US dollars and earning a return exceeding the interest rates on foreign currency deposits in Russian banks. This product is also suitable for customers who want to protect their savings from the ruble’s depreciation.
Vladimir Potapov, Chief Executive Officer at VTB Capital Investment Management said: «We are delighted to be able to offer the GEM Selected Bonds strategy to our retail customers. Previously, the strategy was only available to HNWI clients. We see the strategy as a valuable solution which allows our clients to broaden the geography of investments and source attractive returns from diverse opportunities found across the EM debt market space which provide a viable alternative to hard currency bank deposits».
Head of Press