In today’s moving markets, our multi-layered expert approach to investment in Emerging Markets Fixed Income successfully captures the opportunities across the entire multi-asset class suite.

Our Emerging Markets Fixed Income portfolios are managed by our London based team, which includes eleven portfolio managers (including four dedicated alpha source specialists) plus a risk management team.

We have a multi layered approach to investing in this asset class, viewing EMFI as a multi asset class suite in which EM rates, FX, sovereign credit and corporate credit should all be considered as separate risk asset classes with their own dynamics and drivers. Our investment team and process are specifically designed to generate alpha from each opportunity set and at each stage of our investment process.

We run specialist strategies dedicated to their respective opportunity set within the overall EMFI asset class; an EM hard currency strategy, an EM local currency strategy and a high alpha strategy that blends the two with an actively allocated risk budget.

EUR 3.9 bn

assets under management

15

portfolio managers

3

flagship EMFI strategies

13 years

average investment experience

“Emerging Markets investing has come a long way since the global financial crisis. Rather than seeing the world as a series of countries, I recognise that the EMs have evolved into a true multi-asset universe with global risk factors running through them”.  Bryan Carter, Head of Emerging Markets Fixed Income

Investment Philosophy and Process

The investment process by which EMFI portfolios are managed is clearly defined, disciplined and repeatable. Our starting point is the separation of alpha from beta and the isolation of asset types between sovereign and corporate credit (hard currency) and EM rates and FX (local currency), each of which will respond differently to the same stimuli.

We have a multi layered approach to alpha generation. The first layer originates in the construction of an enhanced underlay of cash bonds. The second layer superimposes active portfolios of trade ideas opportuned from the dedicated alpha generators. The last layer consists of a macroeconomic view set which incorporates specific risk limits and performance targets.

Our process for each of the sources of alpha are strictly independent with active positions conveying conviction and adhering to drawdown limits.

Implementation is overseen by the head of the team with exposures in the live portfolios executed as judged appropriate and in line with the team’s global and fundamental analysis. Final portfolio construction is guided by mandated parameters and risk tolerances of each individual portfolio.

  • Emerging Markets Hard-Currency Fixed Income

    The EMFI Hard Currency strategy is actively managed and seeks to provide investors with strong risk-adjusted returns and enhanced diversification opportunities by investing in fixed income instruments issued by emerging entities (both sovereign and quasi-sovereign) denominated in hard currencies. The fund comprises an enhanced beta underlay of bonds, with active hard currency debt exposures superimposed, and flexible asset allocation dependent on prevailing market conditions.

    At a glance:

    • An actively managed, well diversified portfolio
    • Typically investing in issues from around 50 countries
    • Benchmarked against the JPM EMBI Global Diversified
    • Aims to outperform by 100 bps gross of fees per annum whilst maintaining an ex-ante target annual tracking error of 2%
    • Multi-Layered Approach to Investment in EMFI
    • Independent Alpha Sources from dedicated specialist Portfolio Managers
    • Strength from a Broad and Diverse Investment Team
    • Strict risk management monitored by independent dedicated team
  • Emerging Markets Local Currency Fixed Income

    The EMFI Local Currency strategy is an actively managed strategy, offering potential for high carry, total return and diversification. The fund provides exposure to local bonds, interest rates and currencies in emerging markets using a wide range of instruments and investment techniques, whilst maintaining daily liquidity. The fund comprises an enhanced beta underlay of bonds, with active local currency sovereign exposures superimposed, and flexible asset allocation between interest rates and FX opportunities, dependent on prevailing market conditions.

    At a glance:

    • An actively managed, well diversified portfolio
    • Typically investing in issues from around 20 countries
    • Benchmarked against the JPM GBI-EM Global Diversified
    • Aims to outperform by 150 bps gross of fees per annum whilst maintaining an ex-ante target annual tracking error of 3%
    • Multi-layered approach to investment in EMFI
    • Independent alpha sources from dedicated specialist portfolio managers
    • Strength from a broad and diverse investment team
    • Strict risk management monitored by independent dedicated team
  • Emerging Markets Fixed Income Blended Strategy

    The Best Selection Blended strategy is actively managed and seeks to provide investors with strong risk-adjusted returns and enhanced diversification opportunities by investing in fixed income instruments issued by emerging entities, both sovereign and non-sovereign, denominated in local and hard currencies. The strategy invests according to an active allocation process into both hard and local currency alpha sets, concentrating exposures to the opportunities of highest conviction. Asset allocation and risk budgets are set and monitored dynamically.

    At a glance:

    • An actively managed, well diversified portfolio
    • Typically investing in issues from around 70 countries
    • Benchmarked against 50% JPM EMBI GD + 50% JPM GBI-EM GD
    • Aims to outperform by 300 bps gross of fees per annum whilst maintaining an ex-ante target annual tracking error of 6%
    • High conviction, concentrated alpha EM bond portfolio
    • Dynamic cross allocation between local and hard currency sovereign and quasi-sovereign bonds
    • Strength from a broad and diverse investment team
    • Strict risk management monitored by independent dedicated team