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Swisscanto launches passive EM bond fund

Zürcher Kantonalbank Group’s (ZKB’s) asset management arm, Swisscanto has launched an emerging markets currency bond fund that aims to provide yield in the current low interest rate environment.

Fund launch


Jassmyn Goh

The fund, Swisscanto (CH) Index Bond Fund Emerging Markets Hard Currency was launched on 12 February 2018, is passively managed, and invests primarily US dollar denominated government and quasi sovereign emerging market bonds.

ZKB said the fund offered an attractive yield to maturity by only focusing on issues in USD and this would allow investors to avoid risks associated with local emerging market currency fluctuations.

The firm said the objective of the fund was to track the return and risk characteristics of the J.P Morgan Emerging Markets Bond Global Diversified Index (EMBI) that currently has a yield of around 2.8% hedged in Swiss franc, with a duration of 6.8 years and an average rating of BB+.