Emerging Market Corporate Debt
Emerging market corporate debt has rapidly expanded into a varied and sizeable asset class, spanning many countries, issuers and sectors, each with their own distinct drivers. We believe the growth of the asset class and the diversity of the opportunity set qualifies emerging market corporate debt as a standalone allocation as well as forming an important component of global fixed income portfolios.
Insight offers investors access to this opportunity set through three investment strategies:
- corporate investment grade debt
- corporate high yield debt
- the best opportunities across the full emerging market corporate debt universe
We screen for the most compelling investment propositions across hard and local currency corporate bonds, from investment grade through to high yield. Our emerging market corporate debt portfolios are actively managed against a benchmark, which means they are index aware, not index constrained.
For illustrative purposes only.
As at 30 September 2018. Assets under management (AUM) are represented by the value of cash securities and other economic exposure managed for clients.
Debunking the ESG myths in EMD
Investors often discount the importance of environmental, social and governance (ESG) analysis in emerging market debt (EMD) investing, based on perceptions that emerging market governance is inherently weak or that data is lacking.
Seeking out risk premia in emerging market debt
In 2018, we expect improving economic fundamentals and supportive technical to continue to underpin the asset class.
The next phase in the evolution of emerging market debt investing
While the emerging market debt universe has evolved beyond recognition over the last two decades, the way that investors approach the asset class has been slower to evolve. It is time for investors to look beyond constrained benchmarks and toward a total return approach.
The strategy's target is not a guarantee may not be achieved and a capital loss may occur. Strategies that have a higher performance aim generally take more risk to achieve this and do have a greater potential for the returns to be significantly different than expected.
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.
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.
The issuer of a debt security may not pay income or repay capital to the bondholder when due.
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.
Investments in emerging markets can be less liquid and riskier than more developed markets and difficulties in accounting, dealing, settlement and custody may arise.
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 investment manager may invest in instruments which can be difficult to sell when markets are stressed.
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