Strategies
The Emerging Markets Fixed Income team has been investing in the asset class since 1994. The team successfully provided a broad spectrum of customized strategies constructed from the Investment Grade to Below-Investment Grade offerings of the asset class. The EM investable universe includes Sovereign bonds, Corporate bonds, Local Currency bonds, Distressed debt, Convertible bonds, and Structured Finance. The team’s bottom-up research process emphasizes global and multi-sector diversification to generate attractive risk-adjusted returns from income and capital appreciation.
Philosophy
The Emerging Markets Fixed Income team shares an investment philosophy that is anchored by four key principles:
- Emerging Market debt is a secular improving credit story
- Diversification across regions, countries, and sectors, as well as issuers is fundamental to credit risk management
- Avoiding potential problem credits and minimizing credit losses are as critical as selecting stable or improving credits
- Total returns will be derived from current income and capital gains
Process
The team’s investment process has been tested through numerous market crises. The team uses a five-step, bottom-up investment process designed to identify attractive investments through initial screening, credit research, establishing a link between credit fundamentals and market valuations , portfolio construction, in addition to an active management style. All sovereign and corporate credits are evaluated on a parallel track to identify credit strengths and weaknesses. The team performs scenario analysis for base-, best- and worst-case outcomes that form the basis of the performance benchmarks established for these credits. The team assigns probabilities and market valuations to derive targeted returns; the building blocks of its portfolio construction. Portfolio overlays, an active management style and a strong buy/sell discipline, complete the Team’s process.
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