Babson Capital to launch two new funds tied to emerging markets

By Toni Weeks

San Luis Obispo, Calif., April 15 – Babson Capital Funds Trust gave details about two of its upcoming new funds in an N-1A filing with the Securities and Exchange Commission. The new funds target emerging markets debt and/or currencies and are expected to launch in June.

Both funds will offer class A, class C, class I and class Y shares. The ticker symbols have not yet been determined.

The Babson Emerging Markets Debt Blended Total Return Fund will seek to achieve maximum total return, consistent with preservation of capital and prudent investment management, through high current income generation and, where appropriate, capital appreciation.

The fund will invest in debt securities, derivatives and other instruments economically tied to emerging market countries or countries with relatively low gross national product per capita and with the potential for rapid economic growth. Under normal market conditions, it will invest at least 80% of its net assets in securities denominated in currencies of the emerging market countries, fixed-income securities or debt instruments issued by emerging market entities or sovereign nations and/or debt instruments denominated in or based on the currencies, interest rates or issues of emerging market countries. The fund may invest in both investment-grade and below-investment-grade debt securities.

The portfolio management team will be comprised of Ricardo Adrogue, Cem Karacadag and Brigitte Posch.

Class A shares are subject to a maximum sales load of 4%, while both class A and class C shares will incur a maximum contingent deferred sales charge of 1%. Including management fees of 0.75%, and taking into account the effects of a fee waiver agreement, total annual fund operating expenses are expected to be 1.2% for class A, 1.95% for class C and 0.95% for class I and class Y shares.

The Babson Emerging Markets Local Currency Debt Fund will seek long-term total return through investment in a diversified portfolio of emerging markets local-currency-denominated debt securities.

Under normal market conditions, the fund will invest at least 80% of its net assets in local-currency-denominated debt instruments issued by emerging markets governments and their quasi sovereign agencies, including supranational and sub-national government issuers. The fund may also invest in forwards and other derivative instruments that provide market exposure to such local-currency fixed-income instruments.

Adrogue and Karacadag will be the portfolio managers.

Class A shares are subject to a maximum sales load of 4%, while both class A and class C shares will incur a maximum contingent deferred sales charge of 1%. Total annual fund operating expenses are expected to be the same as those in the active short duration fund.

Charlotte, N.C.-based Babson Capital Management LLC will serve as the investment adviser.

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