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American Beacon Global Evolution Frontier Markets Income Fund

Portfolio information as of September 30, 2014
  • Summary
  • Performance
  • Overview

Investment Objective

The Fund’s investment objective is to seek income with capital appreciation as a secondary objective.

an alternative to traditional
global investing

Global Evolution has distinguished itself with its singular focus on and long-standing expertise in the sovereign debt of emerging and frontier market countries. “Frontier markets” typically describes smaller, less-developed markets at an earlier stage of economic and financial development than more mainstream emerging markets.

Firm inception: 2007

Portfolio Manager:

  • Morten Bugge, CIO, 19 years experience

investment process

Global Evolution’s investment process involves both a top-down approach to assess macroeconomic factors affecting the relationships between developed, emerging and frontier countries, and a bottom-up process to determine the countries in which the portfolio will invest.

Fund highlights:

  • The first and only open-end mutual fund in the U.S. to invest primarily in debt instruments of frontier market issuers.
  • Invests primarily in sovereign debt of frontier markets.

  • Over time, the Fund seeks to invest in 35 to 45 counties, 75 to 125 securities, local and hard currency dominated debt; Fund holdings are limited to 5% maximum single country exposure.

  • Managed by a boutique firm that focuses exclusively on emerging and frontier market debt and is a pioneer investor in frontier market debt.

  • Access to a unique debt market offering attractive yields with lower volatility and low correlations to broad market indexes.

Total Fund Assets

$65.6 Million  

Sub-Advisor (%)

Global Evolution USA, LLC 100.0

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Investing in fixed-income securities entails interest rate risk, which is the risk that fixed-income securities will decrease in value with increases in market interest rates. Frontier market debt may be particularly sensitive to interest rate fluctuations. Credit risk is the risk that the issuer of a bond will fail to make timely payment of interest or principal. Emerging and frontier market countries have experienced difficulty in servicing their sovereign debt on a timely basis, which has led to defaults and the restructuring of indebtedness. The decline in an issuer’s credit rating can cause the price of its bonds to go down. Investing in foreign securities entails additional risk not associated with domestic securities, such as currency fluctuations, economic and political instability and differences in accounting standards. The risks of investing in foreign securities are magnified when investing in emerging and frontier markets. Frontier market countries generally have smaller economies and less developed capital markets or legal, regulatory and political systems than traditional emerging market countries. It may be particularly difficult to enforce the rights of debt holders in frontier and emerging markets. Derivatives may involve certain costs and risks such as liquidity, interest rate, market, credit/counterparty, management and the risk that a position could not be closed when more advantageous. The Fund may invest significantly in a derivative type called a credit-linked note, which is a debt obligation the performance of which is tied to underlying sovereign debt. Investing in derivatives could result in losing more than the amount invested. Because the Fund may invest in fewer issuers than a more diversified portfolio, the fluctuating value of a single holding may have a greater impact on the value of the Fund. Please see the prospectus for a complete discussion of the Fund’s risks. There can be no assurances that the investment objectives of this Fund will be met.

For a prospectus containing more information, including expenses, click here. Read it carefully before you invest or send money. Past performance is no guarantee of future results.

American Beacon Funds and American Beacon Global Evolution Frontier Markets Income Fund are service marks of American Beacon Advisors, Inc.