Schroders brings emerging-markets bond fund to Solana

Schroders and tokenization firm Centrifuge launched a tokenized version of Schroders’ emerging-markets bond strategy on Solana on Nov. 4, extending onchain funds into debt from developing economies. Centrifuge’s announcement says the fund is Schroder International Selection Fund Emerging Market Bond. CoinDesk reports that Schroders managed $1.1 trillion (£867.8 billion) as of June, and that this is its first deployment on Solana.

What do investors hold on Solana?

Investors hold tokenized shares in a feeder fund, a fund that invests in another fund. The feeder invests in Schroders’ underlying Emerging Market Bond Fund; investors do not directly hold that fund or its bonds. CoinDesk reports that the share values track the underlying fund’s net asset value, or NAV—the value of its assets minus liabilities.

Centrifuge provides the tokenization infrastructure. Its announcement names the product as the Schroder International Selection Fund Emerging Market Bond and says it initially launched on Solana. Schroders has managed emerging-markets debt for more than 50 years and has over 40 investment professionals dedicated to the asset class, according to Centrifuge.

What kind of debt does the strategy cover?

The strategy invests in debt issued by governments and companies across emerging economies, CoinDesk reports. That gives investors exposure to borrowers, markets and currencies beyond the U.S. and Europe. The value of emerging-markets bonds can be affected by borrowers’ ability to repay, currency movements and economic conditions in those countries.

Centrifuge says the strategy covers sovereign, corporate and local-currency investments. Sovereign debt is issued by governments; corporate debt is issued by companies. The announcements do not specify the fund’s size or give details on investor eligibility, minimum investment or fees.

How does this change onchain fixed income?

The launch brings actively managed emerging-markets debt to public blockchain infrastructure. Centrifuge’s chief strategy and growth officer, Anil Sood, said onchain fixed income had largely focused on cash and short-duration government securities. He described emerging-markets debt as a different source of risk and return.

Schroders’ senior investment director for fixed income, John Mensack, said the firm sees a role for emerging-markets debt opportunities in the digital financial ecosystem. The move follows Schroders’ earlier tokenization work: CoinDesk reports that the firm received regulatory approval in Ireland in August for a tokenized share class of a U.S. dollar money-market fund.

References

• Centrifuge’s announcement — centrifuge.io
• CoinDesk reports — coindesk.com