Global asset manager Standard Life Investments has launched an Emerging Market Debt (EMD) unconstrained Sicav with an AUM of $100m in order to accommodate demand from European investors for access to this increasingly popular asset class.
It will be co-managed by Richard House, head of Emerging Market Fixed Income and Kieran Curtis, investment director of Emerging Markets, who between them have 36 years of experience managing EMD portfolios.
The Luxembourg registered Sicav is the fourth Emerging Market Debt strategy in the suite of EMD products offered by Standard Life Investments to both retail and institutional investors. It will complement the existing Emerging Market Debt, Emerging Market Local Currency Debt and Emerging Market Corporate Bond funds all of which have outperformed their respective benchmarks since inception.
The manager will have an opportunity set of more than 70 countries in which to invest, covering hard and local currency sovereign debt and hard currency corporate debt.
The investment approach will be highly selective in building a portfolio of best ideas from each segment of the asset class, irrespective of a benchmark weighting, allowing the greatest potential for maximising risk-adjusted returns and building a genuinely diverse portfolio within a risk controlled framework.
The EMD team uses a research-driven top-down view, alongside market insights and detailed country analysis to build a portfolio of best investment ideas and opportunities, working closely with the 40 fixed income team and global emerging market equities team.
“We firmly believe that there are long-term opportunities for investors in this increasingly popular asset class. By opting for an actively managed unconstrained solution such as this, investors can access the best opportunities that exist across the different subsets of the asset class within a single portfolio,” House said.
“While the fundamental backdrop is sound for most emerging market countries, it is important to recognise that this is not universally the case. The lack of an index constraint is designed to help avoid exposure to or to take short positions in countries which are experiencing macroeconomic challenges and where asset price performance is expected to be poor,” he said.