The investment team dynamically manages the strategy’s allocation across the three key levers of foreign currency, interest rates and credit. The team employs an investment process that combines top-down macro analysis with bottom-up emerging market country and credit analysis while separating views with respect to those three levers. Through our top-down macro process and bottom-up credit research, the team seeks to opportunistically manage country, sector and security levels.
As a result, this allows the team to potentially enhance yield and total return as well as effectively manage risk. The team diversifies investments across the entire emerging markets spectrum with targeted risk budget exposures across these opportunities. Often countries with less wealth have the greatest aspirations, and that’s where in our opinion transformative growth is occurring. Understanding these economies requires local knowledge and local information. To recognize the opportunities, we believe you need to look past the short-term volatility and see the bigger picture.
- Seek to understand the primary and secondary risks of each investment
- Separation of views with respect to currency, rates and credit
- Bottom-up, fundamental research seeks to mitigate credit risk
- Tracking error, predetermined risk budgeting
- Control for macro risks at the portfolio level
Firm Level: Independent Risk Management Team
- Performs comprehensive portfolio reviews with investment team and senior management
- Monitors individual security holdings across the entire firm