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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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Important Note Click to maximise

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.

Emerging Markets Debt

Investing in emerging markets debt offers the potential for attractive returns above alternate credit asset classes, especially in the prevailing low interest rate environment.

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.  

A truly flexible investment approach

Drivers of returns are constantly evolving; changeable dependent on varying market conditions. We aim to take advantage of arising opportunities by analysing broader as well as more country specific economic factors within our investment process, for example rates of unemployment or inflation. We have proven that over the long term, this approach can deliver consistent risk adjusted* performance throughout the ups and downs of a market cycle – although please remember that past performance is not a guide to future performance.

A disciplined and repeatable research process

Forward looking and disciplined, our six-factor country research model is designed to prevent confirmation bias*, prompting our experts to consider a broad set of potential drivers of credit returns. An environmental, social, and governance (ESG) assessment is vital to this process too and forms an integral part of our research.

Expert risk management

Risk management is key to our philosophy: it permeates every stage of our investment process. As part of this we are highly focused on liquidity*, a factor that we believe renders us more nimble and responsive in changing markets.

Explore our product

The product section will an interactive version of the fund fact sheets from a third party provider. Template will be the same for all asset classes and circulated shortly. The why invest below will sit alongside the fund data. 

Throughout our range of actively managed strategies, what remains consistent is a proven investment process focused on delivering risk-adjusted* returns.

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 .

Superior research helps us to take advantage of the opportunity

Emerging markets are often slow to price developments, both positive and negative. Through our superior research and systematic forward looking analysis, we believe that we can take advantage of this mispricing by identifying instances where consensus has become too bullish or too bearish. 

Case study

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 can I use emerging markets debt in my portfolio?

Diverse sources of growth in a single asset class

Our investment range offers the potential for broad diversification across risk and reward opportunities coupled with the potential to benefit from higher economic growth versus developed markets, and to gain access to a large range of expanding geographies, countries and sectors.

Growth

Offering our clients diversification and opportunity from some of the world’s most exciting economic engines. 

Yield

Offering our clients the potential for a yield greater than most fixed income asset classes.

Diversification

Giving our clients access to investment grade* and high yield*, hard currency* and local currency as well as government, quasi government and corporate bonds.  A diverse asset class with differing risk return characteristics.

Glossary

Risk-adjusted returns

A risk-adjusted return is the return an investor receives relative to the given level of risk they are taking in a particular investment. Higher returns relative to other investments may not equal a higher risk-adjusted return if the investments being made involves taking more risk. 

Confirmation bias

Confirmation bias refers to the tendency to look for trends or evidence that supports a prior belief about a particular investment, rather than assess its merits objectively. 

Liquidity

Liquidity refers to the speed and ease with which financial assets can be sold in the market without dramatically affecting the price. Highly liquid assets are quickly sold with little-to-no price impact; highly illiquid assets may take a long time to sell and cause a large shift in price.

Valuation

A valuation is the economic value of an investment placed upon it by analysts and fund managers in order to determine what they think is a fair price.

Fundamentals

The fundamentals of a business refers to any broader or more specific economic factors that may contribute to its intrinsic value, from large-scale fundamentals such as competitors or marketplaces, down to small-scale fundamentals such as management quality or financials.

Investment grade bonds

When government or corporate bonds are assessed for their creditworthiness, by companies known as credit ratings agencies, they are broadly placed into one of two groups: a higher rated, more creditworthy 'investment grade' group; or a lower rated, less creditworthy 'high yield' group. 

High yield bonds

When government or corporate bonds are assessed for their creditworthiness, by companies known as credit ratings agencies, they are broadly placed into one of two groups: a higher rated, more creditworthy 'investment grade' group; or a lower rated, less creditworthy 'high yield' group. 

High yield bonds

When government or corporate bonds are assessed for their creditworthiness, by companies known as credit ratings agencies, they are broadly placed into one of two groups: a higher rated, more creditworthy 'investment grade' group; or a lower rated, less creditworthy 'high yield' group. 

Hard currency

Hard currencies refer to major currencies that tend to trade with relatively stable prices and therefore represent a relatively reliable store of value. Generally issued by economically and politically sound countries, by far the most frequently used is the US dollar, but the euro, the yen and pound sterling are also common.

Quasi-government bonds

A quasi-governmental organisation is a private sector company that is supported by govenrment in order to offer a particular service to the public. These entities can issue debt in the form of bonds to fund some of their activities.

Team

Jamie Grant

Head of Emerging Markets and Asian Fixed Income

Mark Bodon

Senior Portfolio Manager

Bilal Khan

Portfolio Manager

Jan-Markus May

Portfolio Manager