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The Strategy's objective is to achieve returns in excess of the JP Morgan Emerging Market Bond Index Global Diversified, over the credit cycle (gross of fees), primarily through country selection.

Strategy overview

  • We predominantly hold hard currency bonds from sovereign and quasi-sovereign issuers.
  • At times, we may hold a few high-conviction, liquid corporates if we see an opportunity for attractive returns.
  • Our focus is on capital preservation and we gain insight from our fundamental research.

Our approach

Investment strategy

  • The strategy seeks to generate excess returns via superior country and issue selection through an in-depth country and security selection process focusing on value in external credit spreads
  • The strategy invests in hard currency, predominantly USD-denominated, sovereign credit across a broad range of emerging market countries; from the more frontier economies such as Ethiopia, through to the more developed economies like Mexico
  • The strategy has a bottom-up portfolio construction process that implements fundamental country views based on our conviction in expected risk-adjusted spread forecasts
  • Our sovereign credit research process uses proprietary models to quantify each country′s willingness and ability to pay its debt and measures how that changes over time and across peers
  • The portfolio′s aggregate exposure to headline risk factors (e.g., US Treasury duration) is managed through liquid instruments and derivatives
  • The Strategy can also have a 20% allocation to hard currency-denominated EM corporate bonds
  • The team 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. BlueBay has 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 the firm’s 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 and successful 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
November 2011
Primary benchmark
JPMorgan EMBI Global Diversified Index
Vehicle
Separate Account, US 40 Act, UCIT, Canadian Mutual Fund

Investment team

BlueBay Fixed Income team

Fixed income specialist providing progressive investment solutions

Connect with our team to learn more

Contact us

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