Strategies & Capabilities

Emerging Market Debt

Emerging Market Debt (EMD) is a rapidly evolving asset class that aims to offer investors diversification benefits, enhanced yield and return potential. The increasing importance of emerging market countries to global trade and GDP elevates the attraction of EMD and we believe it should be an integral part of investor portfolio

Leader in EMD Investing

2005

Our experienced team began managing indexed EMD portfolios.

$39bn

In assets under management. ¹

15

Global team members including dedicated portfolio managers, traders and investment specialists. ¹

Latest Insights

Fixed Income

EMD Commentary Q4 2022

Q4 2022 was positive for EMD, underpinned by easing inflation, a weaker US dollar, and moves by China to relax COVID restrictions.

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Fixed Income

EMD Commentary Q3 2022

EMD was challenged in a turbulent Q3 struggling against a broad investor preference for 'less risky' assets.

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Fixed Income

EMD Commentary Q2 2022

EMD struggled as bigger-than-expected US rate hikes enhanced the attraction of ‘less risky’ US dollar assets. Inflation and recession fears also weighed on investor sentiment.

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Learn more about our Fixed Income Capabilities.

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.

Established Track Records Against Four Key EMD Exposures

EMD Local Currency Sovereigns

EM local currency debt provides investors with yield enhancement and diversification benefits and is increasingly considered an integral part of an investors’ overall asset portfolio.

EMD Hard Currency Sovereigns

EM hard currency debt offers investors a diversified source of yield enhancement for a mixture of investment grade and high yield emerging market sovereigns and is increasingly considered an integral part of an investors’ overall credit portfolio.

Emerging Market Hard Currency Corporate Debt

Hard currency corporate debt is a younger and fast-growing part of the EMD investment universe, offering investors significant diversification benefits and yield enhancement with a lower duration compared to hard currency sovereign debt. Hard currency corporate debt also provides the most diversified exposure in the asset class.

Emerging Market Local Currency Inflation Linked Debt

Inflation-linked EMD offers investors an interesting and complimentary exposure for their fixed income portfolios. Inflation-linked strategies in EMD can provide investors with a form of insurance, or hedge, against both ‘expected’ and ‘unexpected’ inflation and are particularly popular with domestic investors in the major EM markets.

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

Portfolio Managers

Traders

Portfolio Strategist

Footnotes

Disclaimer

Important Risk Information

Marketing Communication

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Investing involves risk including the risk of loss of principal.

The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without State Street Global Advisors express written consent.

The views expressed in this material are the views of the EMEA Fixed Income Specialists of State Street Global Advisors Global Fixed Income Group through the period ended 31st January 2023 and are subject to change based on market and other conditions. This document contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

Currency Risk is a form of risk that arises from the change in price of one currency against another. Whenever investors or companies have assets or business operations across national borders, they face currency risk if their positions are not hedged.

Investing in foreign domiciled securities may involve risk of capital loss from unfavorable fluctuation in currency values, withholding taxes, from differences in generally accepted accounting principles or from economic or political instability in other nations. Investments in emerging or developing markets may be more volatile and less liquid than investing in developed markets and may involve exposure to economic structures that are generally less diverse and mature and to political systems which have less stability than those of more developed countries.

Diversification does not ensure a profit or guarantee against loss.

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