Total Return Emerging Market Debt
Insight’s total return emerging market debt strategies have the freedom to allocate tactically across the emerging market fixed income universe, maintaining a structural beta allocation to the asset class while also having the scope to add value by determining when that beta is attractive or expensive.
While some strategies combine exposure to different segments of the market as part of a total return approach, portfolios are still typically managed with reference to mainstream indices seeking to minimise tracking error. Insight’s total return emerging market debt strategies seek to enhance returns beyond those achieved by traditional index allocations by combining and actively managing exposures to sub-asset classes including local currency debt, external sovereign and corporate debt, tactically allocating between sub-asset classes in a bid to enhance returns.
We employ a singular investment process across external, local and corporate debt that recognises the interdependency of these sub-asset classes. We believe this approach is far superior to approaches that silo these sources of returns and treat them as distinct building blocks through the application of different investment styles and processes to each.
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.
Team statistics as at 30 June 2018. Assets under management (AUM) are represented by the value of cash securities and other economic exposure managed for clients.
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.
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.
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