The asset management arm of France's BNP Paribas said the launch comes in response to client demand for alternative sources of income.

BNP Paribas Investment Partners has launch its first multi-asset income fund focusing on emerging markets. 

The new Parvest Multi-Asset Income Emerging is a sub-fund of Parvest UCITS V SICAV, an open- ended investment company incorporated under Luxembourg law. The fund is aimed at clients seeking to increase their emerging market exposure in line with these regions’ growing share of global economic output, the firm said.

The fund will invest across emerging market asset classes and regions, using a top-down, macro-based fundamental active asset allocation approach with bottom-up active security selection at the asset class level. It targets stable and regular income, focusing on the main emerging market asset classes of equities, local sovereign debt, external sovereign debt, corporate debt, currencies and commodities. Weightings to equities and fixed income may vary significantly, with both ranging between 0 per cent and 80 per cent of the overall portfolio.

“In the current environment of sustained low interest rates and negative government bond yields, income is an increasingly scarce commodity and emerging markets can offer attractive higher-yielding investment opportunities. Market dispersion has risen of late, meaning that not all emerging markets are equal,” said Colin Graham, the firm’s chief investment officer of multi-asset solutions.

“By combining our established multi-asset income capabilities with the first- hand knowledge and understanding of emerging markets that our strong local presence gives us, we are able to identify what we consider to be the most attractive income opportunities from across these asset classes in order to meet the needs of our clients.”

BNP Paribas IP’s multi-asset solutions team has been managing income portfolios for over a decade. The team of more than 50 investment professionals managed over €70 billion ($79 billion) as at 30 June 2016.