Absolute return emerging market debt strategy
Our absolute return emerging market debt strategy takes a distinctive approach to investing in emerging market debt. We recognise the potential returns available from the asset class but believe the timing of an allocation can dramatically affect the returns of a long-only investor.
We believe the key to investing in this asset class is to be selective and focus on what we consider to be the best investment ideas within a portfolio in an attempt to control the potential downside through the use of sophisticated risk management techniques.
Access to a potential source of attractive investment opportunities: emerging market debt is a global asset class that offers investors the potential return and diversification benefits of investing in economies at different stages of economic and structural development. We believe there is a range of attractive opportunities, including interest rate, credit and currency plays, for investors able to identify the most appealing prospects.
Unconstrained approach managed by an experienced team: the strategy invests on a 'best ideas' basis, unrestricted by the constraints of investing against a traditional index.
Breadth of opportunity: the strategy can invest across the asset class, whether in government or corporate debt, in local or external currencies, taking each market's characteristics into account.
Distinctive approach aiming for low volatility: investors face a wide range of return possibilities when they invest across emerging market debt and currencies. In particular, the timing of an allocation can dramatically affect the returns of a long-only investor. We believe the key to investing in the asset class is to follow an alternative approach which does not adhere to traditional benchmark-driven norms.
Experienced team: the team members have invested across the spectrum of the asset class through different market cycles and major market events.
The value of investments and any income from them will fluctuate and is not guaranteed (this may be partly due to exchange rate fluctuations). Investors may not get back the full amount invested. Past performance is not a guide to future performance.
Investments in emerging markets can be less liquid and riskier than more developed markets and difficulties in accounting, dealing, settlement and custody may arise.
Derivatives may be used to generate returns as well as to reduce costs and/or the overall risk of the portfolio. Using derivatives can involve a higher level of risk. A small movement in the price of an underlying investment may result in a disproportionately large movement in the price of the derivative investment.
Where high yield instruments are held, their low credit rating indicates a greater risk of default, which would affect the value of the portfolio.
The issuer of a debt security may not pay income or repay capital to the bondholder when due.
The investment manager may invest in instruments which can be difficult to sell when markets are stressed.
While efforts will be made to eliminate potential inequalities between shareholders in a pooled fund through the performance fee calculation methodology, there may be occasions where a shareholder may pay a performance fee for which they have not received a commensurate benefit.
Where the portfolio holds over 35% of its net asset value in securities of one governmental issuer, the value of the portfolio may be profoundly affected if one or more of these issuers fails to meet its obligations or suffers a ratings downgrade.