Aberdeen Emerging Markets Debt Local Currency Fund (ADLAX) Ad

Find sensible doesn’t need to be boring ad by Aberdeen about mutual fund. It features Aberdeen Emerging Markets Debt Local Currency Fund in Barron’s financial newspaper.

Aberdeen Ad

Source: Barron's

Recently, Aberdeen advertised in Barron’s financial newspaper about “Sensible Doesn’t Need to be Boring”. You can find this ad in Barron’s page S2 on August 26, 2013. They provide 1 mutual fund for your investment or brokerage account: Aberdeen Emerging Markets Debt Local Currency Fund (ADLAX).

While the ad looks promising, you should do more research before investing in this mutual fund. Whether the investment is for your brokerage or retirement account, it is important to understand the risk and investment strategy of this mutual fund. I have provided a fund review below.

The ad is as follow:

Sensible doesn’t need to be boring. 

Aberdeen Emerging Markets Debt Local Currency Fund (ADLAX) 

To help achieve a diversified portfolio, it may pay to be adventures. Aberdeen’s global presence helps you diversify into some of the world’s most dynamic bond markets. 

Supported by 70 emerging market investment professionals covering both debt and equities and a track record of nearly two decades, we seek out potential opportunities across the world. A bit unusual? Yes. Sensible? We think so.

For more information please visit Aberdeen-asset.us/emd 

Aberdeen – Simply asset management. 

Investors should carefully consider a fund’s investment objectives, risks, fees, charges and expenses before investing any money. To obtain this and other fund information, please call 866-667-9231 to request a prospectus, or download a prospectus at www.aberdeen-asset.us. Please read the prospectus carefully before investing any money...

Investment Review

With only $41 million of total assets, this Aberdeen Emerging Markets Debt Local Currency Fund has a low expense ratio fee of 1.17%. It is open to new investors. You can invest as little as $1,000 for your brokerage or retirement account. It does have a front end sales load of 4.25%. The current 12-month yield is 2.88%.

This emerging market bond mutual fund has a high portfolio turnover rate of 74%. As a new mutual fund, it doesn’t have past returns for reference. Morningstar hasn’t ranked this fund yet hence it is still new. Since inception, the fund performance has been below average. It has return -11.51% over the past 1 year.

Other classes of fund are: Class A load waived (ADLAX.lw), Class C (ADLCX), Class I (AEDSX), Class Institutional Service (AEDIX), and Class R (AECRX). The Class I, Institutinal Service, A load waived, and R don’t have a sales load. If you insist of investing in this fund, only consider this no load classes, otherwise your long term investment may suffer.

The top 3 holdings are Republic of South Africa bond 7.25%, Republic of Indonesia bond 7%, and Republic of Turkey bond 10%. The top 2 sectors are government debt (73%), and corporate bond (12%).

Bottom Line

• I don’t think this fund is suitable for long term investment.
• This mutual fund still needs to provide great and consistent return to be considered as long term investment.
• You should avoid the Class A hence it has a steep sales load.