AIB Life Emerging Markets Government Bond

The Emerging Markets Government Bond fund aims to provide passive exposure to bonds issued by emerging market governments and to quasi sovereign bonds that are fully owned or guaranteed by an emerging market government. It invests through index funds rather than by trying to pick individual securities. This means the fund is designed to track the performance of its chosen benchmark rather than to outperform it.

The Emerging Markets Government Bond fund is 50% hedged to euro and has 50% exposure to local market currencies. That means half of the currency movement risk is reduced by hedging, while the other half is left exposed to changes in local currencies versus the euro. Currency risk means the value of an investment can rise or fall when exchange rates move.

The Emerging Markets Government Bond fund has exposure to a range of emerging market countries, including Malaysia, Poland, Thailand, Brazil, South Africa, Mexico, China, India and the Czech Republic, as well as other markets. The mix suggests broad diversification across emerging market government bond issuers. The fund is managed by Irish Life Investment Managers.

The Emerging Markets Government Bond fund aims to provide total return, which means it seeks to deliver both income from bond interest and capital returns from changes in bond prices. It may suit investors who want exposure to emerging market government debt within a passive structure. Because it invests in bonds from emerging markets and includes local currency exposure, returns can be affected by bond market and currency movements.

The Emerging Markets Government Bond fund combines passive index-based investing with emerging market government and quasi sovereign bond exposure, rather than active stock or bond selection. It also has a 50% euro hedge and 50% local currency exposure, which creates a balanced approach to currency movements. The fund is also classified as an Article 8 fund under SFDR, meaning it incorporates environmentally friendly or socially responsible investments.