Mirabaud - Global Emerging Market Bond Fund AH dist. CHF

Performance update

June was marked by heightened political and geopolitical tensions. Key events included Ukrainian drone strikes damaging over 40 Russian aircraft, Turkey's Interior Ministry removing five opposition mayors, and OPEC+ announcing increased oil production from July. However, the dominant driver was the Israeli strikes on Iran, which initially triggered a market sell-off amid fears of escalation. Markets later rebounded sharply following targeted US strikes on Iranian nuclear facilities and the absence of an Iranian military response, ending the month near highs. In the final week of the month, high yield spreads tightened by 20–25bps, US Treasuries rallied 10-15bps. Over the course of the month, USD weakened some 2.5%, boosting EM currencies.

In terms of fund performance, the key contributors were NGN, BRL and CZK local positions, whilst EGP and THB were the main detractors.

Portfolio activity

The fund entered June with an overweight in local currencies and we added to BRL local positions. However, as the geopolitical risks rose, we reduced exposure to CEE currencies and hedged EGP positions. Exposure to high yield and Middle Eastern credits was also trimmed, prioritising risk management over return maximisation. Following the US strikes, we selectively added to Turkish credit and TRY-denominated bonds, capitalising on the improving risk sentiment.