Muzinich & Co has launched an Ucits emerging market short-duration corporate bond fund in Ireland.

The Muzinich & Co Emerging Markets Short Duration Bond Fund will primarily invest in a diversified portfolio of short duration investment grade and high yield corporate bonds from emerging markets-focused issuers.

The Dublin-domiciled fund, which will be managed by Warren Hyland and Christina Bastin, will focus on hard currency bonds.
The fund was launched with an initiative to lower volatility while achieving strong, risk-adjusted returns.

The fund will target at wealth manager and discretionary space, as well as institutional investors, and has an annual management fees ranging from 0.5-1.1%, based on the selected share class.

George Muzinich, chief executive and founder of Muzinich & Co, said: "The potential returns from emerging markets are very compelling. But due to the divergence of returns between countries and issuers, high quality active management is typically required to add real alpha.

"By focusing on shorter-term debt, we believe we are better able to control volatility, which can be higher in emerging markets than in more established ones.

"Creditworthiness of underlying issuers is paramount in portfolio construction. We focus on companies that have sound business plans and solid balance sheets. We aim to generally maintain the duration of the fund at no more than two-and-a-half years," he added.

Hyland said: "Governance and transparency have also generally improved with time. Over the past few years the credit ratings of EM issuers have converged to a large extent with those of developed market issuers. EM debt’s correlation with developed markets is also typically low, giving investors the potential to enhance returns while reducing overall portfolio risk."