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Emerging Market Bonds Strategy
Key facts*
| Investment objective | The strategy aims to maximise long-term returns by investing in debt securities issued by emerging market borrowers |
| Lead portfolio manager | Richard House |
| Benchmark | JPM EMBI Global Index |
| Performance target | To outperform the benchmark by 2% per annum (gross of fees) over rolling 3-year period |
| Investment universe | Securities issued by emerging market countries, comprising sovereign debt and quasi sovereign debt issues in USD. The portfolio can hold up to 30% in local sovereign debt |
| Credit quality | Typical average of BBB+ |
| Number of holdings | Typically between 60 and 80 issues from approximately 30 to 50 issuers |
Philosophy
We believe that top-down macroeconomic analysis, driven by proprietary fundamental research, is the key driver of investment performance. Liquidity considerations are paramount when we choose which securities to best express this top-down view. Portfolio construction focuses on attractive opportunities rather than benchmark-led opportunities.
Process
We seek to exploit opportunities arising from the economic and political environment affecting emerging markets. Our approach is top-down fundamentally driven, reinforced by technical analysis to determine country allocation. We also draw on our global fixed income team and wider investment platform as part of our top-down analysis. Bottom-up stock selection is used to build the final portfolio.
*All data as at 31 December 2011. Where references are made to portfolio guidelines and features, these may be subject to change over time and prevailing market conditions. Actual investment parameters will be agreed and set out in the prospectus or formal investment management agreement. Please note that the performance target may not be attained. We define quasi sovereign as securities with more than 50% ownership or guarantee by the state. We do not hold corporates with a majority private ownership not guaranteed by the state.