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First State readies local currency EMD fund

First State readies local currency EMD fund

First State is preparing to launch a local currency emerging markets bond fund, Wealth Manager understands.

The group has been mulling such a fund since at least 2011, when First State’s Citywire A-rated head of emerging markets debt Helene Williamson (pictured) told Citywire that the firm would launch a local currency fund in ‘a different market environment’. Since then emerging market currencies have plunged: an equally weighted average of the rupee, real, rand and Turkish lira has dropped by 25% against the dollar during that time.

Early last year her colleague Philip Fielding also revealed that First State was progressing with the fund’s development, explaining that the intent was to take advantage of the greater issuance of bonds in local currencies by emerging market states.

Wealth Manager can now confirm that First State has registered the fund with the Financial Conduct Authority, one of the final steps in the process.

Williamson’s hard currency Emerging Markets Bond fund, which is only £43 million in size, has returned 11.6% since inception in October 2011, compared with an average of 3.5% from its IMA sector.

First State has also bolstered Williamson’s team this month by hiring Lamine Bougueroua as a portfolio manager, who will focus specifically on emerging market local currency assets. Bougueroua joined First State from Stone Milliner Asset Management, where he was a global emerging markets strategist. Prior to that, he worked in the same space at both Deutsche Bank and UBS.

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Helene Williamson
Helene Williamson
4/15 in Bonds - Emerging Markets Global Hard Currency (Performance over 3 years) Average Total Return: 7.23%
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