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The five most consistent EMD LC managers

Citywire Investment Research uncovers the developing world debt dynamos from over the past five years.

Looking up in local currency

The emerging markets weathered the storm which was expected to follow President Trump into office and accrued strong positive inflows over the first half of the year. As the prospective impact of the new US leader’s protectionist policies waned, yield-hungry investors turned their attentions to the developing world.

But, which of those operating in the dedicated world of developing market local currency debt has best kept step with the sector’s sudden swings and shifts over the past five years? In this gallery, we uncover the five sector specialists who have consistently gone above-and-beyond the average peer with their returns.

Note: Performance in USD for comparative purposes. Consistency is defined as producing better outperformance than the average manager in each discrete 12 month period between March 2012 and March 2017.

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Michael Simmeth, LGT

Fund: LGT Select Bond Emerging Markets (USD) B

Five-year total return: 3.10%

Best year of outperformance vs. average manager: +5.51% in 2014/15

Rounding out our list of outperformers is LGT Capital Management’s Michael Simmeth, with the German-born investor recognised for one of the three funds he currently oversees. Simmeth, who is Citywire AA-rated, runs convertible bonds, emerging market and high yield bond funds for the group.

In the LGT Select Bond Emerging Markets fund, Simmeth operates a diverse range of country exposures, with 10.5% allocated to Mexico and 8.9% invested in Brazil, which make up his two biggest country bets. He has 32% exposed to BBB-rated bonds and has over half of the fund in US dollar-denominated debt despite the fund’s local currency remit.

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Michael Cirami & John Baur, Eaton Vance

Funds: Eaton Vance Emerging Markets Debt Opportunities;R6; Eaton Vance Emerging Markets Local Income Fund;A; EV Intl (Cayman) Emerging Markets Local Income A

Five-year total return: 2.34%

Best year of outperformance vs. average manager: +4% in 2016/17

One of two duos on this list but the only ones running multiple funds are Eaton Vance’s Citywire AA-rated pair Michael Cirami and John Baur. The pair run three funds in the local currency sector, which includes a Cayman Island-focused fund and two US-domiciled strategies.

Speaking to Citywire Selector earlier this month, Cirami said he did not think South Africa was a worthwhile market for developing world investors to look at. Cirami said the current political turmoil in the country was irrelevant as there was unlikely to be much upside for investors whoever was in charge of policy.

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Michael Hasenstab & Laura Burakreis, Franklin Templeton

Fund: Templeton Emerging Markets Bond A (Qdis) USD

Five-year total return: 16.81%

Best year of outperformance vs. average manager: +9.85% in 2016/17

Boasting the best five-year returns coupled with consistent outperformance are Franklin Templeton duo Michael Hasenstab and Laura Burakreis. The pair have co-run the Templeton Emerging Markets Bond fund since January 2010 when Burakreis and Marco Freire were assigned to the fund, with Freire having since left the group.

According to the latest factsheet for the $4.8 billion fund, the duo focus on investment grade debt issued in local currency, with Brazil and Argentina being the two largest country exposures. Both of these are overweight exposures compared to the JP Morgan EMBI Global Index.

Elsewhere, the pair currently have 9.5% of the fund cash and cash equivalents, while 27% of the fund is exposed to debt with B- rating, which is almost treble the index exposure. The duo boast the biggest margin of outperformance compared to the average by those in this countdown.

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Related Fund Managers

Michael Hasenstab
Michael Hasenstab
7/123 in Bonds - Emerging Markets Global Local Currency (Performance over 3 years) Average Total Return: 7.59%
Laura Burakreis
Laura Burakreis
8/123 in Bonds - Emerging Markets Global Local Currency (Performance over 3 years) Average Total Return: 7.59%
Michael A. Cirami
Michael A. Cirami
20/123 in Bonds - Emerging Markets Global Local Currency (Performance over 3 years) Average Total Return: 1.54%
John R. Baur
John R. Baur
19/123 in Bonds - Emerging Markets Global Local Currency (Performance over 3 years) Average Total Return: 1.54%
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