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BNY Mellon's Dreyfus sees African opportunities

Africa Global Funds
Dec. 8, 2014, midnight
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The Dreyfus Corporation, a BNY Mellon company, has launched the Dreyfus Emerging Markets Debt U.S. Dollar Fund, an actively managed mutual fund with exposure to the African markets.

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The Dreyfus Corporation, a BNY Mellon company, has launched the Dreyfus Emerging Markets Debt U.S. Dollar Fund, an actively managed mutual fund with exposure to the African markets.

The fund's objective is to seek to maximize total return by investing in emerging market bonds and other debt instruments denominated in U.S. dollars including debt issued from government, government-related and corporate issuers.

The fund is sub-advised by Standish Mellon Asset Management Company, and is managed by Alexander Kozhemiakin, head of the emerging market debt team and senior portfolio manager at Standish, and Cathy Elmore, emerging market debt portfolio manager at Standish.

“The fund indeed has exposure to Africa, which is a growing part of our market,” Elmore said.

“Historically, South Africa with its well-developed market has been the largest issuer of USD denominated bonds in the region, but an increasing number of governments in the region have been issuing Eurobonds (Ghana, Nigeria, Namibia, Morocco and Kenya, to name just a few) and there are also corporate opportunities. Africa is offering interesting diversification options outside of the traditional large emerging market countries,” she added.

The strategy is currently invested across 33 countries, including sovereign, sovereign related and corporate issuers.

“The benchmark we are referenced against has a yield of over 5% with an average investment grade credit rating which we believe investors will find attractive,” she added.

The fund's portfolio managers are supported by a dedicated team of traders and research analysts with an average of more than 14 years of industry experience and responsibility for managing approximately $12bn in dedicated emerging markets assets.

The fund's managers employ an active investment process that uses in-depth fundamental country and credit analysis.

A "top down" analysis of macroeconomic, financial and political variables guides country allocation, while a "bottom-up" analysis of the fundamental measures of an issuer's creditworthiness guides securities selection.

“We do not have an AUM target as such but are anticipating that this is a strategy which should attract decent inflows,” Elmore told Africa Global Funds.

“We believe that this fund will be of interest to investors looking for USD denominated bonds with an enhanced yield and regional diversification,” said Elmore.

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