Overview

Investment Approach

The Fund aims to match the performance of the JP Morgan EMBI Global Diversified Custom Defaults Index, the Fund’s benchmark index (Benchmark Index).

The Fund is passively managed and will invest in a portfolio of bonds/ fixed income (FI) securities that as far as possible and practicable consist of the component securities of the Benchmark Index. The Fund will strategically select a representative sample of the securities in the Benchmark Index to construct the portfolio.

The Benchmark Index is based on the long-established flagship J.P. Morgan EMBI Global Diversified and follows its methodology closely, while offering a more accessible universe by limiting the eligibility of non-performing issuers. The Benchmark Index measures the performance of US Dollar denominated bonds issued by governments and government agencies that are 100% guaranteed or owned by the governments and government agencies of emerging markets countries.

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Important Information: Capital at Risk. The value of investments and the income from them can fall as well as rise and are not guaranteed. Investors may not get back the amount originally invested.

The fund invests a large portion of assets which are denominated in other currencies; hence changes in the relevant exchange rate will affect the value of the investment. Compared to more established economies, the value of investments in developing Emerging Markets may be subject to greater volatility due to differences in generally accepted accounting principles or from economic or political instability. The fund invests in fixed interest securities such as corporate or government bonds which pay a fixed or variable rate of interest (also known as the ‘coupon’) and behave similarly to a loan. These securities are therefore exposed to changes in interest rates which will affect the value of any securities held. Certain developing countries are especially large debtors to commercial banks and foreign governments. Investment in debt obligations (sovereign debt) issued or guaranteed by developing governments or their agencies involve a high degree of risk.

All currency hedged share classes of this fund use derivatives to hedge currency risk. The use of derivatives for a share class could pose a potential risk of contagion (also known as spill-over) to other share classes in the fund. The fund’s management company will ensure appropriate procedures are in place to minimise contagion risk to other share class. Using the drop down box directly below the name of the fund, you can view a list of all share classes in the fund – currency hedged share classes are indicated by the word “Hedged” in the name of the share class. In addition, a full list of all currency hedged share classes is available on request from the fund’s management company

To the extent the Fund undertakes securities lending to reduce costs, the Fund will receive 62.5% of the associated revenue generated and the remaining 37.5% will be received by BlackRock as the securities lending agent. As securities lending revenue sharing does not increase the costs of running the Fund, this has been excluded from the ongoing charges.

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