Emerging Markets Debt Short Duration
- AUM $94 million
(31 March 2020)
- Inception Date 2014
- Benchmark Target 3-month LIBOR + 200 bps
- Vehicles Available
- UCITS (Ireland)
The investment philosophy underpinning Barings Emerging Markets Debt Short Duration strategy is to exploit market dislocations by:
- Seeking to identify favorable secular and cyclical credit stories
- Capitalizing on relative value opportunities
- Avoiding credit events by investing in bonds that are nearing maturity
We believe that opportunities can be identified by looking at dislocations in emerging markets and attempting to identify undervalued securities – those that trade at attractive prices relative to their intrinsic value.
We also believe our portfolios should be prudently diversified. Allocations to credit risk should be effectively managed to minimize exposure to any one sector or issuer, helping to limit the downside from unforeseen or unpredictable credit events that may generate negative returns.
The strategy is designed to provide the potential for:
- Stable income generation with historically lower volatility
- Protection from interest rate risk, while still offering attractive total return potential compared to equivalent U.S. Treasuries
- Diversification across the $2.4 trillion EM corporate bond debt market (39% of which comprises maturities between 1-3 years and 55% within 5 years)
Our Value Add
- Consistent and rigorous bottom-up analysis, coupled with top-down macroeconomic research to identify issuers with stable, sustainable business models.
- Experienced emerging markets platform comprised of 20 investment professionals averaging 14+ years of investment experience and managing $7.0 billion in emerging markets debt.
EM Debt: Downturns, Defaults & Diamonds in the Rough
Barings’ Omotunde Lawal and Cem Karacadag explain how COVID-19 is impacting the economies of emerging markets, and how lower oil prices and loose monetary policies may influence the future default picture.View
EM Debt: Investing with Cautious Optimism
Sovereign debt outperformed in Q1 as geopolitical headlines continued to garner attention and commodities rallied. Risks remain for the asset class but some notable headwinds have now become tailwinds.View
Monetary Policy’s Effect on EM Debt
Rate expectations have changed materially across emerging and developed markets in the first quarter of 2019. What does this mean for emerging markets debt? Barings’ Ricardo Adrogué weighs in.View
EM Debt: Navigating a Shifting Macro Backdrop
After a rocky 2018, the picture may be brightening for emerging markets debt. From rising rates to trade wars, some of last year’s headwinds look to be receding, at least for now. Barings’ Ricardo Adroguè and Omotunde Lawal highlight opportunities they’re currently seeing.View
EM Debt—A Brightening Picture?
Barings’ Ricardo Adroguè and Omotunde Lawal highlight opportunities they’re seeing from Mexico and Brazil to more challenged geographies like Turkey and Argentina—and provide insight into how they’re thinking about political hotspots like Venezuela.View