Appetite for emerging market debt rebounded this year, with yield-seeking investors turning their attentions back to the developing world to uncover new ideas.
But it has not been all plain sailing for EMD investors, with 2013’s taper tantrum and the election of Donald Trump in 2016 both serving to spook investors operating in new areas of investment.
So, who has shown their mettle regardless of the market machinations? In this analysis, we look at the 104 fund managers with a five-year track record in the EMD – Global Hard Currency sector to see which have consistently outperformed against their peers.
Taking each individual 12 month period from November to November in the 2012-2017 timeframe, we uncover the three emerging market debt managers able to go above and beyond in even the most trying of circumstances.
Luc D’Hooge, Vontobel
Five year total return (Nov 12-Nov 17): 38.11%
Best year of outperformance vs. average: +8.69% in 2016/17
Citywire AA-rated Luc D’Hooge is the best performing manager in absolute terms in this list and the emerging market debt chief is also among the most consistent in his outperformance. His performance, as with one of his counterparts in this list, is drawn from his overall individual tenure and takes in his time at Dexia AM, now known as Candriam.
He currently oversees two funds at Swiss group Vontobel, with the Emerging Markets Debt fund having the longer track record of the two. When profiled for Citywire Selector’s ‘Star Manager’ feature this year, D’Hooge said the Asian market was proving expensive and opportunities were available in more frontier areas of the universe.
Bart van der Made, Neuberger Berman
Five year total return (Nov 12-Nov 17): 30.74%
Best year of outperformance vs. average: +6.79% in 2013/14
Also boasting strong performance over the course of a company move is Bart van der Made, who has outperformed at both ING (now NNIP) and Neuberger Berman, which he joined in 2013. He is named on one fund at the US group, which he co-runs with Rob Drijkoningen and Gorky Urquieta and has done since its launch in May 2013.
It was during the first year of this fund’s existence that van der Made achieved his greatest outperformance versus the average manager. He and his colleagues returned 12.09% in US dollar terms against an average manager return of 5.3% over the 12 months from November 2013 to November 2014. Urquieta and Drijkoningen are not recognised here as they run other funds in the EMD HC universe.
Morten Bugge, Global Evolution
Fund(s): Global Evolution Funds - EM Blended Debt R EUR/Global Evolution Funds - EM Debt I EUR/Global Evolution Funds - Emerging Frontier Z USD/Global Evolution Funds - Frontier Markets I EUR/Global Evolution Funds Frontier Opp Z (EUR)
Five year total return (Nov 12-Nov 17): 21.99%
Best year of outperformance vs. average: +2.85% in 2016/17
Rounding out our list of ultimate outperformers is Morten Bugge of Global Evolution, who was also previously recognised for his consistency in the local currency market. Bugge also has the honour of achieving consistent outperformance while running the widest array of funds, with five of his strategies currently sitting in the hard currency sector.
Citywire + Bugge has managed money in this market since 2011, with the Global Evolution Funds – Frontier Markets and Global Evolution Funds – EM Blended Debt being his two longest-running approaches. While his cohorts have achieved wider levels of outperformance, Bugge has accrued modest outperformance over the five years but, nevertheless, has never dipped below the average manager’s return.