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Given the divergent trend of market returns of the various emerging market debt sub-asset classes over the last few years, the strategy offers an investment solution which can actively asset allocate across these sectors, thereby providing a valuable source of return as well as helping to reduce volatility.

Strategy overview

  • Offers attractive yield levels and a substantial spread premium relative to developed market credits,
  • Designed to offer diversified exposure to the broadest range of US dollar denominated sovereign and corporate debt
  • Leverages the expertise across both investment teams.

Our approach

Investment strategy

  • Long-only exposure to the broad spectrum of emerging market sovereign and corporate credit; pure hard currency focus with no emerging market local currency volatility
  • A holistic emerging market debt portfolio jointly managed by emerging market sovereign and corporate teams
  • High conviction approach comprising established ideas across the emerging market sovereign and emerging market corporate universe
  • Bottom-up, fundamental, research-driven approach at the country and company level, albeit with significant macro input
  • Tactical asset allocation between sovereign and corporates depending on market directionality, is a source of additional value
  • BlueBay believes that taking into account environmental, social and governance (ESG) factors is an important aspect of the investment process. As such, ESG integration – the systematic review of material ESG investment risks – is applied across all our strategies. We have been a UN-PRI signatory since 2013

Emerging market debt expertise

  • The firm has a strong and proven emerging market debt capability dating back to its inception.
  • We have built a team and a business which today manages in excess of USD$10bn and has established itself as one of the most respected asset managers in this space.
  • Our expertise covers the full spectrum of emerging market sub-asset classes – from traditional benchmarked single sector strategies to unconstrained strategies and hedge funds. Our diversified investor base entrusts us with managing assets incorporating standardized as well as customized, client-specific requirements.
  • BlueBay has always endeavoured to be at the forefront of development and innovation in the market as the asset class has evolved and has consistently been one of the first movers in new asset classes, whether in local currency debt, corporate debt or EM alternatives.
  • We are an active manager, and our philosophy is rooted in the belief that EM remains an inherently inefficient asset class – there are price discrepancies which can be exploited in meaningful size to generate strong risk-adjusted returns.
  • Our long track record in multiple products demonstrates an ability and keen willingness to generate returns through superior and meticulous research, strong risk management and a focus on capital preservation.

Additional information

Inception
July 2015
Primary benchmark
50% JP Morgan Emerging Market Bond Index Global Diversified and 50% JP Morgan Corporate Emerging Market Bond Index Diversified
Alpha objective
200 bps
Vehicle
Separate Account, UCITS

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