Stone Harbor details its two new emerging markets fixed-income funds

By Toni Weeks

San Luis Obispo, Calif., Sept. 8 – Stone Harbor Investment Funds announced in an N-1A filing with the Securities and Exchange Commission more details about its two new emerging markets fixed-income funds, the Stone Harbor Emerging Markets Debt Allocation Fund and the Stone Harbor Emerging Markets Debt Blend Fund. The funds are expected to launch on or right after the date of the prospectuses, which was Sept. 5.

Peter J. Wilby, Pablo Cisilino, James E. Craige, David A. Oliver, Angus Halkett and William Perry are the portfolio managers for both funds.

Each fund seeks to maximize total return, which consists of income on its investments and capital appreciation, but will pursue its objective with a slightly different strategy, as described below. Investments may be made in dollars or in the predominant currency of the emerging market country.

The debt allocation fund will normally invest, directly or indirectly, at least 80% of its net assets in emerging markets investments, which include fixed-income securities and derivative instruments that are tied to an emerging market country or whose performance is linked to those countries’ currencies, markets, economies or ability to repay loans. The fund expects to invest primarily indirectly by investing an allocation of 50% in each of the Stone Harbor Emerging Markets Debt Fund and Stone Harbor Local Markets Fund but is not required to invest any of its assets in those funds.

The debt blend fund will also normally invest, directly or indirectly, at least 80% of its net assets in emerging markets investments. Besides the fixed-income securities and derivative instruments as in the fund above, this fund will also invest in loans that are tied to an emerging market country or whose performance is linked to those countries’ currencies, markets, economies or ability to repay loans. The fund expects to invest primarily indirectly by investing in each of the Stone Harbor Emerging Markets Debt Fund (40% weight), Stone Harbor Local Markets Fund (50% weight) and Stone Harbor Emerging Markets Corporate Debt Fund (10% weight) but is not required to invest any of its assets in those funds.

Both funds offer institutional class and distributor class shares. The ticker symbols were not included in the filing.

There are no shareholder or redemption fees. Including management fees of 0.7% and taking into account the effects of a fee waiver and expense reimbursement agreement, total annual fund operating expenses are expected to be 0.85% for institutional class shares and 1.1% for distributor class shares.

New York-based Stone Harbor Investment Partners LP will be the investment adviser.

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