Neuberger Forecasts Sunny Skies for Emerging Markets with New Fund
Reported by Katie Lobosco
Neuberger Berman[profile] is the latest money manager to launch a fund with exposure to emerging markets by unveiling the Neuberger Berman Emerging Markets Income Fund.
The new product will be managed by Rob Drijkoningen and Gorky Urquieta, co-heads of Neuberger Berman’s emerging markets debt (EMD) team, as well as Jennifer Gorgoll, Raoul Luttik, Nish Popat, and Bart van der Made.
According to the company, the fund's managers believe emerging market economies will steadily improve through the remainder of 2013, with growth accelerating in 2014.
Neuberger has a 22- person emerging market debt team which includes 12 portfolio managers, six credit analysts and four economists and strategists, operating from offices in the U.S., Europe and Asia, and providing dedicated regional expertise and around-the-clock market coverage. The team's skillets include hard and local currency mandates, as well as EMD corporate bond and dedicated Asian debt strategies.
Here is the press release:
Company Press Release
NEUBERGER BERMAN INTRODUCES EMERGING MARKETS INCOME FUND FOR U.S. INVESTORS
NEW YORK, September 30, 2013 – Neuberger Berman Group LLC, one of the world’s leading employee-controlled money managers, is pleased to announce the launch of the Neuberger Berman Emerging Markets Income Fund (“the Fund”) (tickers: NERAX, NERCX, NERIX), as U.S. investors continue to seek ways to diversify their portfolios and generate income in a low-yield investment environment.
The Fund’s managers believe emerging markets economies will steadily improve through the remainder of 2013, with growth accelerating in 2014. That anticipated growth trajectory supports their opportunistic approach to emerging markets debt (EMD), as they have the flexibility to invest across emerging markets hard currency, local currency and corporate bonds.
The Fund’s lead managers are: Rob Drijkoningen and Gorky Urquieta, co-heads of Neuberger Berman’s EMD team, as well as Jennifer Gorgoll, Raoul Luttik, Nish Popat, and Bart van der Made. They and colleagues joined Neuberger Berman earlier this year and previously managed over $16 billion in EMD assets at their former employer. In addition to the new Neuberger Berman Emerging Markets Income Fund, the team manages institutional portfolios for U.S. and international clients, and three Dublin-domiciled Emerging Markets Debt UCITS funds for non- U.S. investors.
“We believe the structural case for EMD remains strong, as investors increasingly recognize the economic significance, improved credit quality, and depth of emerging markets economies and capital markets,” said Drijkoningen. “EMD should continue to benefit from the long-term trend of inflows, as investors in the U.S. and internationally look to include emerging markets to their fixed income exposure,” Urquieta added.
Neuberger Berman’s EMD team is one of the largest and most experienced in the investment management industry, with team members having managed EMD portfolios since 1994. The 22- person investment team includes 12 portfolio managers, six credit analysts and four economists and strategists, operating from offices in the U.S., Europe and Asia, and providing dedicated regional expertise and around-the-clock market coverage. Neuberger Berman’s EMD investment capabilities span hard and local currency mandates, as well as EMD corporate bond and dedicated Asian debt strategies.
About Neuberger Berman
Neuberger Berman is a private, independent, employee-controlled investment manager. It partners with institutions, advisors and individuals throughout the world to customize solutions that address their needs for income, growth and capital preservation. With more than 400 professionals focused exclusively on asset management, it offers an investment culture of independent thinking. Founded in 1939, the company provides solutions across equities, fixed income, hedge funds and private equity, and had $214 billion in assets under management as of June 30, 2013. For more information, please visit our website at www.nb.com.
An investor should consider Neuberger Berman Emerging Markets Income Fund’s investment objectives,
risks and fees and expenses carefully before investing. This and other important information can be found in
the Fund’s prospectus or summary prospectus, which you can obtain by calling 877.628.2583. Please read the
prospectus or summary prospectus carefully before making an investment.
The value of an individual security or particular type of security can be more volatile than the market as a whole and can perform differently from the value of the market as a whole. In addition, the Fund is classified as non- diversified. As such, the percentage of the Fund’s assets invested in any single issuer or a few issuers is not limited by the Investment Company Act of 1940. Investing a higher percentage of its assets in any one or a few issuers could increase the Fund’s risk of loss and its share price volatility, because the value of its shares would be more susceptible to adverse events affecting those issuers.
The Fund’s yield and share price will fluctuate in response to changes in interest rates. In general, the value of investments with interest rate risk, such as fixed income securities, will move in the direction opposite to movements in interest rates.
The Fund’s performance could be affected if borrowers pay back principal on debt securities before or after the market anticipates such payments, shortening or lengthening their duration. Floating rate securities can be less sensitive to prepayment risk.
Lower-rated debt securities (commonly known as “junk bonds”) involve greater risks than investment grade debt securities. Lower-rated debt securities may fluctuate more widely in price and yield than investment grade debt securities and may fall in price during times when the economy is weak or is expected to become weak.
Loans generally are subject to restrictions on transfer, and the Fund may be unable to sell loans at a time when it may otherwise be desirable to do so or may be able to sell them only at prices that are less than what the Fund regards as their fair market value. Loans may be difficult to value. Therefore, there is a risk that the value of the collateral securing a loan may decline after the Fund invests and that the collateral may not be sufficient to cover the amount owed to the Fund. In the event the borrower defaults, the Fund’s access to the collateral may be limited or delayed by bankruptcy or other insolvency laws.
Foreign securities, including those issued by foreign governments, involve risks in addition to those associated with comparable U.S. securities. Additional risks include exposure to less developed or less efficient trading markets; social, political or economic instability; fluctuations in foreign currencies or currency redenomination; potential for default on sovereign debt; nationalization or expropriation of assets; settlement, custodial or other operational risks; and less stringent auditing and legal standards. Investing in emerging market countries involves risks in addition to and greater than those generally associated with investing in more developed foreign countries. The governments of emerging market countries may be more unstable and more likely to impose capital controls, nationalize a company or industry, place restrictions on foreign ownership and on withdrawing sale proceeds of securities from the country, and/or impose burdensome taxes that could adversely affect security prices.
Sovereign debt securities are subject to the risk that a governmental entity may delay or refuse to pay interest or repay principal on its sovereign debt, due, for example, to cash flow problems, insufficient foreign currency reserves, political considerations, the relative size of the governmental entity’s debt position in relation to the economy, its policy toward international lenders or the failure to put in place economic reforms required by multilateral agencies. If a governmental entity defaults, it may ask for more time in which to pay or for further loans.
Non-U.S. currency forward contracts, options, swaps, or other derivatives contracts on non-U.S. currencies involve a risk of loss if currency exchange rates move against the Fund. Forward contracts are not guaranteed by an exchange or clearinghouse and a default by the counterparty may result in a loss to the Fund.
Leverage amplifies changes in the Fund’s net asset value (“NAV”). Derivative instruments that the Fund uses create leverage and can result in losses to the Fund that exceed the amount originally invested.
The use of options involves investment strategies and risks different from those associated with ordinary portfolio securities transactions. If the Fund’s Portfolio Managers apply a strategy at an inappropriate time or judge market conditions or trends incorrectly, options may lower the Fund’s return.
Derivatives involve risks different from, and in some respects greater than, those associated with more traditional investments. Derivatives can be highly complex, can create investment leverage and may be highly volatile, and the Fund could lose more than the amount it invests. Derivatives may be difficult to value and may at times be highly illiquid, and the Fund may not be able to close out or sell a derivative position at a particular time or at an anticipated price.
The Fund may engage in active and frequent trading and may have a high portfolio turnover rate, which may increase the Fund’s transaction costs, may adversely affect the Fund’s performance and/or may generate a greater amount of capital gain distributions to shareholders than if the Fund had a low portfolio turnover rate.