Changes to the Aegon Investec Emerging Markets Debt Blended (BLK) fund

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On 31 May 2018, the underlying fund manager of the Aegon Investec Emerging Markets Debt Blended (BLK) fund, (Investec Funds Services Ltd), made changes to the benchmark and objective of the underlying fund.

As a result of these changes, we’ve also updated the benchmark and objective for the Aegon Investec Emerging Markets Debt Blended (BLK) fund available via our Aegon TargetPlan fund range.

The changes in more detail

The benchmark has been updated to include currency hedged versions of the JPMorgan EBMI Global Diversified and JPMorgan CEMBI Broad Diversified indices. Following the United Kingdom’s vote to leave the European Union, there has been increased volatility between sterling and the US dollar. Consequently, the underlying fund manager has seen significant demand from investors to reduce the fund’s sterling (GBP) to US dollar (USD) exchange rate risk.

As a result, they have introduced currency hedging derivatives to the underlying fund. This strategy is designed to seek to reduce (but not remove entirely) the impact of exchange rate movements between its base currency (GBP) and USD. This hedging will be implemented automatically regardless of whether the rate of exchange between GBP and USD is increasing or decreasing.

The fund objective has been updated to reflect this. The changes are detailed in the table below.

What this means for investors

Nothing else about the fund has changed as a result of this; the fund manager, charges and Aegon TargetPlan Relative Risk Profile remain the same.

For more information on this fund, you can view the fund factsheet via the ‘Fund prices and performance’ page on our website and selecting ‘TargetPlan funds’. Please note that as these factsheets are updated on a quarterly basis, it may take time for these updates to take effect.

Existing benchmark New benchmark
50% JPM GBI-EM Global Diversified/30% JPM EMBI Global Diversified/20% JPM CEMBI Broad Diversified 50% JPMorgan GBI-EM Global Diversified, 25% JPMorgan EBMI Global Diversified GBP Hedged, 25% JPMorgan CEMBI Broad Diversified GBP Hedged
Existing fund objective New fund objective
The Fund will invest wholly in the Investec Emerging Markets Debt Blended Fund, a third party UCITS fund. The Investec Emerging Market Debt Blended Fund aims to provide income and generate capital gains over the long term primarily through investment in public sector, sovereign and corporate fixed interest instruments issued by emerging market borrowers or borrowers that derive a predominant part of their economic activity from emerging market countries. The fund will invest wholly in the Investec Emerging Markets Debt Blended Fund, a third party UCITS fund. The Investec Emerging Market Debt Blended fund aims to generate income and long-term capital growth primarily through investment in bonds issued by governments, institutions or companies in emerging markets (countries that are in economic terms less developed than the major Western countries). These bonds are issued in either the currency of the country in which they are issued or in hard currencies (globally traded major currencies). The fund uses a currency hedging strategy that aims to reduce the impact of exchange rate movements between US dollars (USD) and sterling (GBP). It uses derivatives (financial contracts whose value is linked to the price of an underlying asset) for efficient portfolio management and investment purposes.

Source: Aegon UK

There’s no guarantee the fund will meet its objectives. The value of an investment can fall as well as rise and is not guaranteed. You could get back less than you originally invested.

What investors need to do

Existing investors don’t need to do anything. Please speak to a financial adviser if you’re unsure about what these changes mean for you. If you don’t have a financial adviser you can find one in your area at https://www.moneyadviceservice.org.uk/en