The Case for Emerging Market Corporate Bonds
Learn why the emerging market corporate bonds asset class is increasingly viewed as a valuable source of returns and portfolio diversification.
INVESTMENT STRATEGIES
Emerging Markets Corporate Debt
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Overview
The strategy seeks to provide total return in excess of the benchmark by investing primarily in emerging market corporate bonds and other fixed and floating rate securities, with a preference for USD-denominated issues. The strategy will invest at least 70% of its net assets in emerging market corporate bonds and other fixed and floating rate securities. The strategy may invest up to two-thirds of its net assets in non-investment grade securities including up to 20% of its net assets in distressed debt securities. A variety of instruments/strategies may be utilized in order to achieve the objective including, but not limited to, forward foreign exchange contracts (including non-deliverable forwards), interest rate futures, bond futures, options and OTC swaps such as interest rate swaps, credit default swaps, credit default swaps on indices.
Investment Approach
- Talented team that brings different skill sets, with portfolio managers drawing on bottom-up credit analysts who are accountable for the ideas they generate.
- Initial filtering (thematic and quantitative) provides focus for idea generation. Macroeconomic analysis helps tilt portfolio exposures to profit from directional shifts and reduce risk. Core credit analysis is complemented by active duration management, use of derivatives (including credit default swaps and futures), and off-benchmark investments, which may include sovereign bonds and developed market issuers with emerging market exposure.
- The team seeks to minimize or exploit volatility as appropriate. Scenario analysis and portfolio diversification help reduce risk with interest rate exposure actively managed.
High Conviction
Flexible Portfolio Construction
Risk Management
Portfolio Management
Featured Insights
Why Emerging Market Corporate Bonds?
The EM corporate debt market is a large and diverse asset class. Offering diversity and liquidity, with higher spread and shorter duration characteristics, learn why the asset class can present good opportunities for investments in today’s environment.
Performance
RETURNS
| Inception: Dec 01, 2014 | 3M | YTD | 1YR | 3YR | 5YR | 10YR | Since Inception |
|---|---|---|---|---|---|---|---|
| Composite Gross | 3.72% | 7.52% | 9.50% | 5.44% | - | - | 5.98% |
| Composite Net | 3.36% | 6.76% | 7.97% | 3.95% | - | - | 4.48% |
| JP Morgan Corporate Emerging Markets Bond Index | 3.50% | 8.83% | 10.21% | 5.54% | 4.84% | 7.23% | 5.15% |
| Inception: Dec 01, 2014 | 3M | YTD | 1YR | 3YR | 5YR | 10YR | Since Inception |
|---|---|---|---|---|---|---|---|
| Composite Gross | 4.06% | 9.10% | 10.85% | 4.78% | - | - | 6.09% |
| Composite Net | 3.70% | 8.08% | 9.30% | 3.31% | - | - | 4.59% |
| JP Morgan Corporate Emerging Markets Bond Index | 3.25% | 9.94% | 10.94% | 4.88% | 4.90% | 6.63% | 5.19% |
Past performance cannot guarantee future results. Investing involves risk, including the possible loss of principal and fluctuation of value. Returns greater than one year are annualized. Returns are expressed in U.S. dollars. Composite returns are net of transaction costs and gross of non-reclaimable withholding taxes, if any, and reflect the reinvestment of dividends and other earnings.
The gross performance results presented do not reflect the deduction of investment advisory fees and returns will be reduced by such advisory fees and other contractual expenses as described in the individual contract and Form ADV Part 2A.
Net performance results do not reflect the deduction of investment advisory fees actually charged to the accounts in the composite but they do reflect the deduction of model investment advisory fees based on the maximum fee rate in effect for the respective time period, adjusted for performance-based fees where applicable. Actual advisory fees may vary among clients invested in the strategy shown and may be higher or lower than model advisory fees. Returns for each client will be reduced by such fees and expenses as negotiated in any client contract as discussed in Form ADV Part 2A.
The gross performance results presented do not reflect the deduction of investment advisory fees and returns will be reduced by such advisory fees and other contractual expenses as described in the individual contract and Form ADV Part 2A.
Net performance results do not reflect the deduction of investment advisory fees actually charged to the accounts in the composite but they do reflect the deduction of model investment advisory fees based on the maximum fee rate in effect for the respective time period, adjusted for performance-based fees where applicable. Actual advisory fees may vary among clients invested in the strategy shown and may be higher or lower than model advisory fees. Returns for each client will be reduced by such fees and expenses as negotiated in any client contract as discussed in Form ADV Part 2A.