Yesterday Chicago-based Northern Trust unveiled the Northern Multi-Manager Emerging Markets Debt Opportunity Fund (officially launched on Tuesday) with an expense ratio of 93 basis points. BlueBay and Lazard both sub-advise pieces of the fund.
Chris Vella, chief investment officer for multi-manager solutions at Northern Trust, described the new fund's goal as capturing "diverse sources of return from emerging markets debt, including local and external currencies, and sovereign, quasi-sovereign and corporate issuers."
Company Press Release
Emerging Markets Debt Fund Launched by Northern Trust
Chicago, December 05, 2013 —
To offer investors exposure to the full spectrum of emerging markets debt with the potential for higher yields, diversification and an attractive risk-return profile, Northern Trust has launched the Northern Multi-Manager Emerging Markets Debt Opportunity Fund (NMEDX).
"The emerging markets debt asset class has evolved over the past few decades, driven by improving fundamentals, structural changes and increased investor interest," said Chris Vella, Chief Investment Officer for Multi-Manager Solutions at Northern Trust. "Our fund intends to capture diverse sources of return from emerging markets debt, including local and external currencies, and sovereign, quasi-sovereign and corporate issuers. This style provides investment managers with the broadest opportunity set to invest in and allows for expanded alpha[1] potential in their sector and security allocation decisions."
Launched on December 3, 2013, the Northern Multi-Manager Emerging Markets Debt Opportunity Fund invests at least 80 percent of net assets in fixed income securities that provide exposure to a blend of local and hard currency emerging or frontier market issuers. The Fund can also opportunistically invest in emerging market corporate bonds.
The Fund's total net operating expense ratio is .93 percent[2] and the minimum investment is $100,000. The Fund takes a multi-manager approach, with assets allocated to multiple outside sub-advisers using distinctive investment styles. Northern Trust will conduct manager research, selection, optimization and oversight. Current investment sub-advisers to the fund are:?
BlueBay Asset Management LLP - Fundamental, bottom-up country analysis and selection focus. Relative value analysis then determines trade-offs between potential investments and risk management.?
Lazard Asset Management LLC - Top down approach that begins with an assessment of the global macro environment followed, by bottom-up analysis of individual countries.
Northern Trust is a pioneer in multi-manager solutions, having launched our first multi-manager program in 1979. As of September 30, 2013, Northern Trust managed approximately $37.8 billion assets in multi-manager programs, in addition to assets under advisement of $43.8 billion for institutional and personal clients. Northern Trust invests with more than 200 external managers worldwide, offering personal and institutional solutions that include retail mutual funds, alternative asset classes, emerging manager programs and total investment program management.
Northern Funds are distributed by Northern Funds Distributors, LLC, not affiliated with Northern Trust.
About Northern Trust
Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of investment management, asset and fund administration, banking solutions and fiduciary services for corporations, institutions and affluent individuals worldwide. Northern Trust, a financial holding company based in Chicago, has offices in 18 U.S. states and 18 international locations in North America, Europe, the Middle East and the Asia-Pacific region. As of September 30, 2013, Northern Trust had assets under custody of US$5.2 trillion, and assets under investment management of US$846.2 billion. For more than 120 years, Northern Trust has earned distinction as an industry leader in combining exceptional service and expertise with innovative products and technology. For more information, visit www.northerntrust.com or follow us on Twitter @NorthernTrust.
Important Risk Information
Bond Risk:Bond funds will tend to experience smaller fluctuations in value than stock funds. However, investors in any bond fund should anticipate fluctuations in price, especially for longer-term issues and in environments of rising interest rates. Credit/Default Risk: is the risk that the inability or unwillingness of an issuer or guarantor of a fixed-income security to meet its payment or other financial obligations will adversely affect the value of the Fund's investments and its returns. Changes in the credit rating of a debt security held by the Fund could have a similar effect. Currency Risk: Foreign currencies will fluctuate in value relative to the U.S. dollar; therefore you may lose money if the local currency of a foreign market depreciates against the U.S. dollar. Emerging and Frontier Markets Risk: Emerging and frontier market investing may be subject to additional economic, political, liquidity and currency risks not associated with more developed countries. Additionally, frontier countries generally have smaller economies or less developed capital markets than traditional emerging markets and, as a result, the risks of investing in emerging market countries are magnified in frontier countries. Foreign (Non-U.S.) Securities Risk: Investing in foreign (non-U.S.) securities may result in the Fund experiencing more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies, due to less liquid markets, foreign government intervention and adverse economic, political, diplomatic, financial and regulatory factors. High Yield Risk: Although a high yield fund's yield may be higher than that of fixed income funds that purchase higher-rated securities, the potentially higher yield is a function of the greater risk that a high yield fund's share price will decline. Interest Rate Risk: Increases in prevailing interest rates will cause fixed-income securities, including convertible securities, held by the Fund to decline in value. Liquidity Risk: Some securities held by the Fund may be difficult to sell, or illiquid, particularly during times of market turmoil. Illiquid securities also may be difficult to value. If the Fund is forced to sell an illiquid asset to meet redemption requests or other cash needs, the Fund may be forced to sell at a loss. Non-Diversified Risk: The Fund invests in a smaller number of securities than the average mutual fund. The change in value of a single holding may have a more pronounced effect on the Fund’s net asset value and performance than for other funds.
Please carefully read the prospectus and summary prospectus and consider the investment objectives, risks, charges and expenses of Northern Funds before investing. Call 800-595-9111 to obtain a prospectus and summary prospectus, which contains this and other information about the funds.
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[1] Alpha -- Measures a fund's risk-adjusted performance and represents the difference between a fund's actual performance and its expected performance, given its level of risk.
[2] The Gross and Net Expense Ratios, 1.25% and 0.93%, respectively, are as of the most recent prospectus. The Net Expense Ratio includes contractual expense reimbursements that, if not extended, will end on July 31, 2014.
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