The fund, to be managed by Kieran Curtis, will invest in local currency and is part of a selection of funds planned for the new emerging market debt team.
The new fund will complement the emerging market debt fund launched by Standard Life Investments in October last year and follows the launch of the Global Emerging Markets Equity Unconstrained Fund, also in October last year.
Euan Munro, head of multi-asset investing & fixed income, acknowledged that emerging market debt funds had been hit recently by falls in the bond markets.
Munro said despite ‘wobbles’ with emerging market currencies experiencing depreciation against hard currencies such as the US dollar, the money flows into the asset class had been ‘consistently positive’ over the last few years, adding that they now comprised of around 12% of the global bond market.
Munro also said the prospects of emerging markets were generally more favourable.
“This strong fundamental backdrop has not been fully priced in so on valuation grounds, emerging market economies are relatively cheap, presenting investors with opportunities for capital appreciation," he added.
“The active currency exposure within the new fund provides an opportunity to further enhance returns, and the improving credit ratings of emerging market countries has led to greater liquidity and less volatility."
Standard Life’s fund will initially be available to investors in the UK, Switzerland, the Netherlands and Luxembourg with further plans afoot to register in other European countries.
