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Strategies & Capabilities
Emerging Market Debt
Emerging Market Debt (EMD) is a rapidly evolving asset class that can offer fixed income investors diversification benefits and enhanced yield and return potential.
The EMD universe offers investors a broad spectrum of opportunities from local to hard currency debt, from investment grade to high yield, and from sovereign to corporate debt. Investors can pick and choose their exposure depending on the risk and return profile they are looking for.
- EMD has seen solid growth over the past decade, as of end June 2020 the investible EMD universe in hard currency sovereign, corporate debt, local currency nominal and inflation linked sovereign debt stood at $5.5 trillion based on the flagship JPM and Barclays indices.1
- As emerging market countries grow and develop their financial markets, new countries are added to the flagship EMD indices.
- With EM countries increasing importance to global trade and GDP, EMD cannot be ignored and at State Street Global Advisors we believe it should be an integral part of investor portfolios.
Emerging Market Debt : Cautious Optimism
Emerging bond markets have rallied strongly since the sharp drawdown last year. Valuations have recovered even as some fundamentals – such as debt sustainability and fiscal discipline – have become challenged. But while the start of 2021 has shown that smooth sailing cannot be guaranteed, there are reasons to remain optimistic towards EMD.
Case for Allocating to Emerging Market Debt
For more yield, albeit with more risk, EM Debt is the place to go. EMD is a versatile asset. Its low correlations with global equities and global bonds make it a welcome addition for both global equity and debt investors.
Latest Insights
Emerging Market Debt Commentary – May 2021
EM bonds typically advanced in May, bolstered by brightening economic prospects, EM currency gains, and a dip in US Treasury yields.
India Sovereign Bonds: Index Inclusion on the Horizon
India is making it easier for foreign investors to invest in the country's bonds – getting its sovereign bonds included in benchmark indices is a key pillar of that plan.
To the Brink and Back : Emerging Market Debt in 2020
The Emerging Market debt experience in 2020.
Leader in Emerging Market Debt Investing
2005 |
2011 |
2012 |
2014 |
2016 |
2019 |
| First Index EM Local Debt Strategy (Including China Onshore Bond Market) | First Indexed Global EM Local Debt Strategy (ETF) | SPDR® BofAML Emerging Markets Corporate Bond Strategy |
Custom Indexed Middle East (UAE) USD Sovereign & Credit Strategy | Multi-Factor EM Local Debt Strategy |
Indexed Local EMD SICAVs including ESG versions |
- State Street Global Advisors is leader in EMD investing and a pioneer in indexed EMD launching our first indexed strategy in 2005.
- Today we manage over $24bn2 in dedicated EMD portfolios and are among the largest EMD investors in the world.
- We manage assets across local currency nominal and inflation linked debt and hard currency corporate and sovereign debt.
- Global expertise, local knowledge – two EMD investment centres located in London and Singapore
- Our approach to indexing has delivered close tracking while reducing implementation costs and has been recognised by institutional and retail investors alike.
- Our dedicated EMD team means that we have the expertise to deliver this complex beta exposure in an efficient and cost effective way.
- We have a solutions oriented approach and work in partnership with institutional investors to meet their investment objectives.
Our Capabilities
Our Emerging Market Debt strategies aim to deliver the performance of all the major EMD benchmark indices through the use of sophisticated investment techniques.
Through our long-standing track record, across the full EMD spectrum, we have accumulated deep market insights and expertise of how these markets operate and perform.
We manage a variety of funds and ETFs as well as separately managed accounts that track the performance of the established institutional EMD benchmarks, as well as customised versions of these. We have considerable experience partnering with our clients to design the specific EMD exposure and strategy they want, one that is consistent with their own investment objectives and beliefs.
We have established track records against four key EMD exposures:
Our Team
Abhishek Kumar
Head of Emerging Market Debt
Kheng-Siang Ng
Asia Pacific Head of Fixed Income
David Furey
Head of Fixed Income Strategists – EMEA
Jonathan Camissar
Zhen Li
Robert Golcher
Catherine Smith
James Cavanagh
Richard Tute
Lyubka Dushanova
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07/31/2021
1 Source: Barclays, JP Morgan, State Street as of 30th June 2020
2Source: State Street Global Advisors as of 31st March 2020