Specialist in Asia Pacific, Japan, China, India and South East Asia and Global Emerging Market equities.
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Specialists in equity portfolios in Asia Pacific, emerging markets, global and sustainable investment strategies
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This document is a financial promotion for The First Sentier Global Fixed Income Strategy. This information is for investors in the UK and EEA and elsewhere where lawful. Investing involves certain risks including:
- The value of investments and any income from them may go down as well as up and are not guaranteed. Investors may get back significantly less than the original amount invested.
- Currency risk: the Fund invests in assets which are denominated in other currencies; changes in exchange rates will affect the value of the Fund and could create losses. Currency control decisions made by governments could affect the value of the Fund's investments and could cause the Fund to defer or suspend redemptions of its shares..
- Credit risk: the issuers of bonds or similar investments that the Fund buys may get into financial difficulty and may not pay income or repay capital to the Fund when due.
- Interest rate risk: bond prices have an inverse relationship with interest rates such that when interest rates rise, bonds may fall in value. Rising interest rates may cause the value of your investment to fall.
- Currency hedged share class risk: Hedging transactions are designed to reduce currency risk for investors. There is no guarantee that the hedging will be totally successful or that it can eliminate currency risk entirely.
- Derivative risk: derivatives are sensitive to changes in the value of the underlying asset(s) and/or the level of the rate(s) from which they derive their value. A small movement in the value of the assets or rates may result in gains or losses that are greater than the amount the Fund has invested in derivative transactions, which may have a significant impact on the value of the Fund.
- Below investment grade risk: below investment grade debt securities are speculative and involve a greater risk of default and price changes than investment grade debt securities. In periods of general economic difficulty, the market prices of these types of securities may decline significantly.
For details of the firms issuing this information and any funds referred to, please see Terms and Conditions and Important Information.
For a full description of the terms of investment and the risks please see the Prospectus and Key Investor Information Document for each Fund.
If you are in any doubt as to the suitability of our funds for your investment needs, please seek investment advice.
Jamie Grant
Head of Emerging Markets Debt and Asian Fixed Income
Access fast growing and diverse economies
Continually evolving, emerging market economies and companies have greater opportunity to grow in comparison to developed markets, offering investors the opportunity to generate potential returns from an asset class that also offers diversification from other commonly held investments.
Investing in emerging markets debt offers the potential for attractive returns above alternate credit (corporate bond) asset classes, especially in the prevailing low interest rate environment.
Why invest with us?
Diversified exposure to emerging markets: our strategy is to invest in government, quasi government* and corporate bonds. Our investment process gives us flexibility to choose where opportunities are available in the market to generate returns for our clients.
A proven track record: over the last decade, we have successfully navigated the ups and downs of market cycles, as well as the more idiosyncratic turning points in particular markets. Not only this, our active investment style and focus on risk management means we’ve been able to control some of the risks that can cause investments to fall in value.
A proven track record: over the last decade, we have successfully navigated market cycles and idiosyncratic country turning points. Not only this, our active investment style and focus on risk management means we’ve been able to offer protection on the downside.
Environmental, social and governance (ESG) integration: Specific country and corporate ESG considerations are an essential part of our in-house research .
Why we are watching mispricing in Turkey
Turkey’s economic recovery was materially impacted by the pandemic. Once the fight against the COVID-19 pandemic gained some ground, Turkey started to ease the restrictions imposed since mid-March. Data released by the Ministry of Health towards the end of June was encouraging, with the number of new cases and daily casualties having peaked and with recoveries on an upward trend. Success against the pandemic and early start of the normalization process proved to be positive as the budget deficit slowed.
Caution remains and fairly so, given the risk of a second wave of cases following the easing of restrictions. Any economic recovery will likely have been hampered by the weakness of external demand until Turkey’s export markets, in particular Europe, recovered. The future of tourism – a key industry for both the official and grey economy – depends on the global success against the pandemic and the easing in global travel.
We have taken advantage of opportunities in Turkey during periods of mispricing. The country’s bonds have been volatile and investment discipline has been necessary. Market technicals, valuations, a belief in the strength of Turkey’s institutions and geo-politics have been drivers for our recent positioning.
Meanwhile, credit fundamentals require a strong focus. Access to USD liquidity and net foreign assets of the central bank are key considerations. A sharp reversal in Turkey’s current account positon from a weaker currency is normally the path to growth for the country. However, the pandemic’s hit to global growth and fiscal shocks for Turkey mean we remain cautious until the budget deficit is controlled and the Turkish currency stabilises without on-going reduction of USD reserves.
How we invest in Emerging Markets Debt
Team
