Emerging market debt (EMD) is a specialist sub-asset class with unique benefits. We take an unconstrained, active approach to seek out opportunities across the investment universe. Our aim is to find a balance across yield, quality and liquidity. This gives us the flexibility to navigate changing market conditions and effectively manage risk.
Our EMD specialists have over 40 years combined experience, bringing with them a deep understanding of the emerging and frontier market universe, as well as currency management – both of which are key to understanding and navigating the dynamic world of EMD. They are supported by the wider fixed income team and the SRI team.
Top-down research informs our dynamic allocation across the different geographies and sectors of the EMD universe. As a small team based in one location, we can respond quickly to changes in the market environment.
EMD is a complex sub-asset class that is exposed to higher volatility and lower liquidity. For us, maintaining a strong liquidity profile for increased flexibility in different market environments is key. Risk management is therefore an integral part of our process.
The EMD universe is constantly evolving across sovereign and corporate debt in both hard and local currencies. The strategy also has the flexibility to invest in frontier markets. Against this backdrop, benchmarks fail at not only capturing the best opportunities, but also avoiding unnecessary risks. Consequently, the strategy adopts a high conviction, active approach to capture opportunities across the global universe with a focus on finding value.
Understanding the dynamics and interdependency of the three main risks in EMD is key to sustained returns. The strategy’s high-conviction focus leads to a defined view across the three main risks – credit, duration and currency.
Head of UK Wholesale