EMD Investing in the Aftermath of the COVID Crisis

Why Investors Should Consider Indexing for Hard Currency Allocation

Emerging market hard currency sovereign debt presents a large and diversified investment universe with long-term upside potential. Often considered the domain of active managers, the reality is that many such managers in this asset class struggle to (1) outperform their benchmark in a consistent manner or (2) to protect capital during periods of drawdown - undermining the main rationale for investors traditionally choosing active approaches. Furthermore, the challenges that active hard currency managers face could be exacerbated by the COVID-19 induced crisis.