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At-a-glance
| Provides access to |
Emerging markets fixed income
|
| Benchmark |
JP Morgan Emerging Markets Bond (EMBI) Global Diversified |
| Invests primarily across |
|
| Active Risk |
|
| Excess return target1 | 100 – 200 bps over a full market cycle |
| Tracking error budget | 200 – 300 bps over a full market cycle |
| Information ratio target | 0.50 – 1.00 |
Overview
The strategy seeks to generate attractive risk-adjusted performance and compelling relative results versus its benchmark using a broad, diverse opportunity set of emerging market debt securities. The team invests across the full spectrum of emerging markets debt opportunities with a primary focus on hard currency denominated securities across sovereign, quasi- sovereign and emerging markets corporate issuers. Alpha is sought primarily through highly opportunistic country allocations and security selections.
Strategy highlights
- Constantly assess and price country risk: Emerging markets are heterogeneous, complex and dynamic and driving optimal country-level exposure is critical to driving consistent, incremental alpha.
- Intra-country exposure focused on best bottom-up ideas: Complementing sovereigns with emerging markets corporates enhances risk-adjusted returns.
- Add incremental alpha through relative value and trading: Emerging markets debt is less efficient with disparate pricing and distortions between credits and along curves.
Emerging markets portfolios that complement sovereigns with corporates can provide significant advantages versus single sector approaches.
Portfolio management team
¹ Target returns are not guaranteed. Any target data or other forecasts contained herein are based upon subjective estimates and assumptions; if any of the assumptions used do not prove to be true, results may vary substancially.
Important information on risk
Investing in securities involves risk of loss that clients should be prepared to bear. There is no assurance that an investment will provide positive performance over any period of time. Past performance is no guarantee of future results and different periods and market conditions may result in significantly different outcomes. Investing in foreign denominated and/or domiciled securities may involve heightened risk due to currency fluctuations, inflation, social, economic, political risks and different accounting standards, all of which may be enhanced in emerging markets of developing countries. It is not possible to invest in an index. Performance for indices does not reflect investment fees or transactions costs.
Responsible investing incorporates Environmental Social Governance (ESG) factors that may affect exposure to issuers, sectors, industries, limiting the type and number of investment opportunities available, which could result in excluding investments that perform well.
ESG integration is the consideration of financially material ESG factors in support of portfolio management for actively managed strategies. Financial materiality of ESG factors varies by asset class and investment strategy. Applicability of ESG factors may differ across investment strategies. ESG factors are among many factors considered in evaluating an investment decision, and unless otherwise stated in the relevant offering memorandum or prospectus, do not alter the investment guidelines, strategy or objectives.
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