Emerging market debt sectors have gathered momentum and are attracting inflows once again. In this current low-yielding environment investors have returned to these regions where good positive yields can still be gained from these debt instruments.
The Bonds – Emerging Markets Hard Currency sector has gathered the most assets and the funds in this space and offer investors the high potential returns from debt issued by emerging countries, while USD denomination mitigates exposure to currency risk.
As the market picks up we take a closer look at four of the strongest investment groups operating in the sector based on our unique analysis, which gives Citywire Group Ratings* to those with consistent long-term outperformance in the sector.
*To see the methodology for Group Ratings, please click here.
Platinum – Edmond de Rothschild AM
Experience: 12 years, four months
Group total AUM: €15.3 billion
Assets in this sector: €0.48 billion
Both managers have run this fund since its launch in January 2016. The duo’s favoured investment sectors at the end of October were external government debt, which accounted for 60.4% of the portfolio, and utilities & energy (11.7%).
Platinum – Danske Fund Management Company
Experience: Four years, four months
Group total AUM: €3.25 billion
Assets in this sector: €0.15 billion
Bent Lystbæk is the manager behind Danske Fund Management Company’s Platinum rating. He currently manages four funds in the sector: the Danske Invest EM Debt HC osuuslaji, EM Debt Hard Currency AC, EM Debt Hard Currency Acc and the Emerging Markets Debt Kasvu funds. Lystbæk currently ranks in first position for his three-year risk-adjusted returns in the sector to the end of October.
Gold – Sydinvest
Experience: 43 years, eight months
Group total AUM: €26.3 billion
Assets in this sector: €1.68 billion
Sydinvest’s Platinum group rating is down to the performance of Jens Erik Boesen, Phillip Blackwood, Rune Juel Hansen and Thomas Brund. This quartet co-manage the Sydinvest Hojrentelande A DKK Akkumulerende KL fund.
Brund, Juel Hansen and Blackwood started managing the strategy in 2007, while Boesen came aboard in 2013. On a three-year risk-adjusted basis, all managers rank within the first quartile for their performance in the sector.
Gold – First State
Experience: 14 years, six months
Group total AUM: €34.5 billion
Assets in this sector: €0.08 billion
The main driver behind First State’s Gold group rating is Helene Williamson, who manages the First State Emerging Markets Bond fund. At the end of October her top issuers in the fund were Argentina Republic Government, accounting for 7.3% of the portfolio and the Republic of Turkey (5.7%).
Williamson has over 14 years’ experience of managing funds in this sector and is currently ranked within the first quartile for her own three-year risk-adjusted returns to the end of October.
This article originally appeared in the December-January edition of Citywire Selector magazine.