Emerging markets debt

Managing Emerging Market bonds since 2011, we seek to add value over the medium term through active management of allocation across the Emerging Market debt universe.

Our edge

  • Our highly experienced team has navigated through different market cycles and major market events, including the European sovereign debt crisis in late 2011, taper tantrum in 2013, as well as the oil market sell-off in 2015-2016.
  • The Emerging Market debt team sits within the broader Fixed Income team in Singapore, benefitting from the combined investment expertise and insights of a well-resourced and experienced team.
  • As one of the largest fixed income managers in Asia, our scale allows us to establish a strong presence in the market that helps facilitate good primary deal allocation.

Team

  • The highly experienced team has been managing Eastspring’s Emerging Market bond strategy since April 2011 and is part of a well-resourced and stable Fixed Income team, consisting of 17 investment professionals and 1 quantitative analyst.
  • The Emerging Market Bond team leverages on the research efforts of the broader team where different members focus on analysing global macro, commodities, Asian interest rates and currencies, credits as well as industry trends.

Investment Philosophy

  • We invest with a medium-term view.
  • We believe that investing on the back of fundamental, valuation and technical analysis can generate superior long-term returns.
  • Cyclical extremities in interest rates and credit spreads give rise to opportunities.
  • Shifts in investor risk perception can also create opportunities as assets get mispriced, relative to their fundamentals.

Investment Process

eastspring
  • 1. We conduct macroeconomic and market research to determine the investment outlook and establish the fair value of the broad interest rate, credit and currency markets.
  • 2. We combine fundamental, valuation and technical analyses of relevant markets to determine the portfolios’ country/ sector allocation, duration and yield curve strategy, as well as currency positioning.
  • 3. Combining both top-down and bottom-up analysis, we construct portfolios that reflect the team’s duration/yield curve, sector, credit and currency risk preferences within the permitted risk parameters.
  • 4. We review portfolio risk exposures on an ongoing basis, with portfolio actions discussed with the broader investment team on a regular basis.

ESG

We incorporate ESG issues into our fundamental analysis of companies and assess their impact on an issuer’s financial performance, default risk and bond valuations. The process involves assessing the quality of the company’s corporate governance by taking into account its level of corporate transparency, track record of business integrity, and audit practices. We also consider the severity of allegations and reputational risks. A company’s preparedness in dealing with ESG issues is also key. Our credit analysts determine the materiality of these issues and the appropriate risk premium to be priced. We make use of both information gathered from public sources as well as directly through our interactions with the companies in our assessment and monitoring.