BNY Mellon Investment Management has launched a new long-only, total return fund for Insight Investment’s head of emerging market fixed income Colm McDonagh. 
The new fund will be run by FE Alpha Manager McDonagh with support from boutique subsidiary Insight Investment’s emerging market debt team.
The strategy has an unconstrained approach to emerging market debt, investing across both corporate and sovereign assets from around the world.
McDonagh said: “Emerging market debt has undergone a dramatic transformation over the past two decades and today accounts for approximately 25 per cent of global fixed income with opportunities in more than 70 countries.
“Investors are increasingly moving away from constrained single-sector emerging market debt to strategies where the investment manager has the freedom to allocate across all opportunities at their own discretion.”
FE Alpha Manager Colm McDonagh currently manages two other funds: BNY Mellon Emerging Markets Corporate Debt and Absolute Insight Emerging Market Debt.
McDonagh has overseen the $344.1m, five FE-crown rated BNY Mellon Emerging Markets Corporate Debt since January 2012.
Over that period, the fund has delivered a total return of 72.76 per cent compared with the average IA Global Emerging Markets Bond fund return of 26.38 per cent, as the graph chart shows.
Performance of fund vs sector under McDonagh
Source: FE Analytics
The $1.1bn Absolute Insight Emerging Market Debt fund, which aims to deliver absolute returns in all market conditions, has returned 87.9 per cent since he took over in November 2008.
McDonagh joined Insight in November 2008 and is responsible for all emerging debt strategies and has previously held senior roles at Hydra Capital Management and Aberdeen Asset Management.
Commenting on the new fund lunch, Adrian Lowcock, investment director at Architas, said: “Colm McDonagh is very experienced with over 15 years in Emerging Market debt.
“In addition to his knowledge, he brings a very risk aware process to the fund, with a general focus on downside risk protection, which is very useful when investing in emerging markets.”
He added: “He leads a focused and experienced team of analysts and is able to draw on the expertise and wider resources from Insight for currency and rates views and credit research.”
“I would expect this fund to be managed in way which reflects Colm’s existing approach, so managed using a combination of his experience in emerging market debt, risk and trading strategies as well as the extensive expertise of insight in fixed income.”