OP-EMD Local Currency (Fund) is a bond fund that invests all of its assets, with the exception of cash assets, in the mutual fund Ninety One Emerging Markets Local Currency Dynamic Debt Fund. This underlying investee fund is registered in Luxembourg.
The Fund is a non-UCITS fund, since its rules allow it to invest all of its assets in a single mutual fund or undertaking for collective investment (CIU) that fulfils the EC Directive on Undertakings for Collective Investment in Transferable Securities (UCITS Directive). The Fund mainly invests its assets through the Underlying Investee Fund in fixed-income instruments issued or guaranteed by governments, other public-sector entities, supranational organisations and corporations in emerging markets.
In its investment operations, the Fund may use derivative instruments in its cash management and investments in other funds. The underlying asset of such derivative contracts may be a currency or a foreign exchange rate. The fund's modified duration, a measure of the price sensitivity of a bond to interest rate movements, typically ranges between 4 and 6.
The Underlying Investee Fund may make extensive use of various asset classes in emerging bond markets. The main target markets are Latin America, Asia, Eastern Europe,Africa and the Middle East. The emphasis of the Underlying Investee Fund’s investments is typically on long-term fixed-income products, so in terms of interest rate risk the Fund is on a par with long-term bond funds. The Underlying Investee Fund aims to focus its investments on fixed-income instruments issued and denominated in the local currency of emerging economies (so called local currency). It may also utilise fixed-income instruments issued and denominated in the currency of developed economies (so called hard currency).
The Fund’s benchmark index is JPM GBI-EM Global Diversified. With active investing, the Fund seeks to outperform its benchmark index in the long term. The Fund mainly takes notable active risk and it may differ significantly from the composition, weights and risk level of the benchmark index.