At a Glance
As of September 30, 2023
About the Fund
The Europac International Bond Fund offers a distinct combination of developed markets and emerging markets, in highly-rated bonds, with a low duration and no hedging to the US Dollar. This means that you can access the potential growth and income opportunities of international bond markets, without taking on excessive interest rate risk or currency risk.
Unlike many other international bond funds, the Europac International Bond Fund does not hedge its currency exposure back to the US Dollar. This means that you can benefit from the diversification and appreciation of non-USD currencies, especially in times of US Dollar weakness. Many other bond funds have no currency limitations, and will actively hedge back into the USD without notice. This may leave some advisors or investors thinking they are diversified when in fact, they are not.
Another advantage of the Europac International Bond Fund is that it does not have too much exposure to one foreign currency, like the Yen or Euro, which is a problem with many other international bond funds trying to match their benchmarks. The fund invests in a balanced mix of developed and emerging market bonds, in various currencies, such as the Euro, the British Pound, the Australian Dollar, the Canadian Dollar, the Swiss Franc, Indonesian Rupee, Mexican Peso, the Norwegian Krone, the Swedish Krona, the Singapore Dollar, the Hong Kong Dollar, and more. This way, you can instantly diversify your clients into non-USD bonds today, without worrying about having too much exposure to one foreign currency.
The Europac International Bond Fund also focuses on high quality bonds, with an overall investment grade rating or higher. The fund invests in sovereign and corporate bonds from countries with strong economic fundamentals and stable political systems. The fund avoids bonds from countries with high debt levels, fiscal deficits, or political instability. The fund also has a lower relative duration, which means that it is less sensitive to changes in interest rates than longer-term bonds.
The Europac International Bond Fund is a great way to get immediate currency diversification, with high quality bonds, and the potential for attractive yield.
Investment Process
The Fund uses a top-down allocation approach to select what it views as the most fundamentally sound countries and currencies to invest in and a bottom-up approach to select undervalued government and corporate bonds.
Issuer Type
As of September 30, 2023 | % of Total Portfolio Holdings
| Goverment | 51.3% |
| Corporate | 27.3% |
| Supranational** | 21.5% |
Top 10 Currency Allocation
As of September 30, 2023 | % of Total Portfolio Holdings
| MXN | 14.9% |
| IDR | 11.0% |
| NOK | 10.8% |
| EUR | 10.7% |
| INR | 8.8% |
| CAD | 8.6% |
| PHP | 6.8% |
| BRL | 5.9% |
| SGD | 4.1% |
| COP | 3.7% |
Top 10 Country Allocation
As of September 30, 2023 | % of Total Portfolio Holdings
| Supranational | 23.3% |
| Norway | 10.8% |
| Canada | 8.6% |
| Australia | 5.9% |
| Mexico | 5.6% |
| Brazil | 5.2% |
| Germany | 4.9% |
| South Korea | 4.5% |
| Britain | 4.5% |
| Singapore | 4.1% |
Fund Strengths
Goal
Seek income and capital appreciation by investing in foreign bonds of issuers in Europe and the Pacific Rim.
Valuation
The fund is not tied to a benchmark, allowing it to invest in countries that exhibit more yield per unit of risk. Our fixed income and equity teams share insight, which allows us to invest a small portion of the funds assets into high-quality and less-visible corporate issuers, further increasing potential yield per unit of risk.
Strength
The fund has consistently maintained a focus on investment-grade bonds with a higher yield to maturity and lower duration than it benchmark. With a commitment to zero US Dollar hedging, our investors can be confident their foreign bond allocation will always be foreign.
Management
The fund managers have 40 years of combined investment experience and have both been with Euro Pacific since the funds inception. With a broad knowledge of many country fundaments, our team is able to search out and find potnetial value where others cannot.
