A research-driven and environmental, social, and governance (ESG)-focused emerging markets sovereign debt solution. We seek to generate strong relative performance against the benchmark using in-depth research to construct a diversified portfolio of the most attractive sovereign and quasisovereign bonds.
SFDR Product Information*
Read more about SFDR including information on our Article 8 and 9 funds
*Sustainable Finance Disclosure Regulation
Our investment philosophy is based on the principle that emerging markets debt (EMD) is a heterogeneous, semi-efficient market with multiple sources of mispricing. We believe in casting the widest possible net to identify and profitably exploit opportunities, looking for them at every level of analysis – asset class, country, industry, issuer, and security.
Risk-adjusted portfolio management style
Aim to deliver true alpha through skillful country and security selection, tactfully modulating risk rather than achieving outperformance by structurally taking more risk than the benchmark
ESG innovation
A transparent, proprietary sovereign ESG methodology that focuses on income-adjusted scores, providing insights and clear exclusion criteria
An experienced, well-resourced EMD team
A dedicated EMD team comprising veteran investors with many years of combined experience managing the full spectrum of EMD
The team follows a methodical process that starts with an assessment of the global macro environment, then proceeds to sovereign analysis and ESG assessment.
The objective of the global macro analysis is to anticipate the general direction of global credit spreads, developed market rates, and the US dollar.
Sovereign analysis is conducted by a team of dedicated regional specialists. Our final assessments encompass all relevant economic and political variables.
ESG analysis is an integral component of the sovereign research process. We incorporate ESG factors into our decision-making by using our proprietary sovereign ESG framework, which adjusts for a country’s level of economic development and policy effort. The strategy excludes the bottom quartile of ESG-scored sovereigns.
Our dedicated emerging markets corporate analysts also conduct the stand-alone credit assessment of quasi-sovereign bonds.
Benchmark: The J.P. Morgan Emerging Markets Bond Index (EMBI) Global Diversified tracks total returns for US dollar-denominated debt instruments issued by emerging market sovereign and quasi-sovereign entities, including Brady bonds, loans, and Eurobonds, and limits the weights of the index countries by only including a specified portion of those countries’ eligible current face amounts of debt outstanding.
For more information about our Credit capabilities
Risks
Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.
International investments entail risks including fluctuation in currency values, differences in accounting principles, or economic or political instability. Investing in emerging markets can be riskier than investing in established foreign markets due to increased volatility, lower trading volume, and higher risk of market closures. In many emerging markets, there is substantially less publicly available information and the available information may be incomplete or misleading. Legal claims are generally more difficult to pursue.
Fluctuations in exchange rates between various foreign currencies may cause the value of the investment to decline. The market for some (or all) currencies may from time to time have low trading volume and become illiquid, which may prevent the Strategy from effecting positions or from promptly liquidating unfavourable positions in such markets, thus subjecting the investment to substantial losses.
IBOR risk is the risk that changes related to the use of the London interbank offered rate (LIBOR) or similar rates (such as EONIA) could have adverse impacts on financial instruments that reference these rates. The abandonment of these rates and transition to alternative rates could affect the value and liquidity of instruments that reference them and could affect investment strategy performance.
The disruptions caused by natural disasters, pandemics, or similar events could prevent the strategy from executing advantageous investment decisions in a timely manner and could negatively impact the strategy’s ability to achieve its investment objective and the value of the strategy’s investments.
Governments or regulatory authorities have, from time to time, taken or considered actions that could affect various sectors of these securities market.
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