Global Evolution’s Post

Bredec Group Ninety One introduces emerging market transition debt strategy - Funds Europe Magazine: Ninety One introduces emerging market transition debt strategy  Funds Europe Magazine [email protected]

🌍💪 𝐎𝐧𝐞 𝐨𝐟 𝐭𝐡𝐞 𝐛𝐞𝐬𝐭 𝐞𝐦𝐞𝐫𝐠𝐢𝐧𝐠 𝐦𝐚𝐫𝐤𝐞𝐭𝐬 𝐝𝐞𝐛𝐭 𝐡𝐚𝐫𝐝 𝐜𝐮𝐫𝐫𝐞𝐧𝐜𝐲 𝐟𝐮𝐧𝐝𝐬 𝐰𝐨𝐫𝐥𝐝𝐰𝐢𝐝𝐞 𝐢𝐧 2023! WITH AN IMPRESSIVE INFORMATION RATIO OF 3.39, our 𝐃𝐚𝐧𝐬𝐤𝐞 𝐈𝐧𝐯𝐞𝐬𝐭 𝐄𝐦𝐞𝐫𝐠𝐢𝐧𝐠 𝐌𝐚𝐫𝐤𝐞𝐭𝐬 𝐃𝐞𝐛𝐭 𝐇𝐚𝐫𝐝 𝐂𝐮𝐫𝐫𝐞𝐧𝐜𝐲 𝐟𝐥𝐚𝐠𝐬𝐡𝐢𝐩 𝐟𝐮𝐧𝐝 performed better than almost all global peers last year 🚀 “Our thorough and systematic approach to country allocation as well as security selection really paid off,” says Soeren Moerch, Head of Emerging Markets Debt at Danske Bank Asset Management. An advanced #AI-based credit rating model was among the factors that contributed to the strong performance. “It enables us to make even better decisions in terms of country allocation. We use it in tandem with our traditional econometric model, which has been the backbone of our EMD HC strategy for years. When the signals from both models align, we can be more confident about the result,” says Søren Mørch. Furthermore, a more active approach to portfolio management helped in outperforming the benchmark. Be aware that investing in emerging markets debt comes with risks. Credit risk is generally the most important risk factor. Furthermore, yield spreads tend to widen during periods of financial market crisis, thus resulting in losses. 𝘛𝘩𝘦 𝘧𝘶𝘭𝘭 𝘧𝘶𝘯𝘥 𝘯𝘢𝘮𝘦 𝘪𝘴 𝘋𝘢𝘯𝘴𝘬𝘦 𝘐𝘯𝘷𝘦𝘴𝘵 𝘚𝘐𝘊𝘈𝘝 𝘌𝘮𝘦𝘳𝘨𝘪𝘯𝘨 𝘔𝘢𝘳𝘬𝘦𝘵𝘴 𝘋𝘦𝘣𝘵 𝘏𝘢𝘳𝘥 𝘊𝘶𝘳𝘳𝘦𝘯𝘤𝘺 𝘊𝘭𝘢𝘴𝘴 𝘐. 𝘛𝘩𝘦 𝘪𝘯𝘧𝘰𝘳𝘮𝘢𝘵𝘪𝘰𝘯 𝘳𝘢𝘵𝘪𝘰 𝘮𝘦𝘢𝘴𝘶𝘳𝘦𝘴 𝘵𝘩𝘦 𝘳𝘪𝘴𝘬-𝘢𝘥𝘫𝘶𝘴𝘵𝘦𝘥 𝘳𝘦𝘵𝘶𝘳𝘯 𝘰𝘧 𝘵𝘩𝘦 𝘧𝘶𝘯𝘥 𝘳𝘦𝘭𝘢𝘵𝘪𝘷𝘦 𝘵𝘰 𝘪𝘵𝘴 𝘣𝘦𝘯𝘤𝘩𝘮𝘢𝘳𝘬. 𝘛𝘩𝘪𝘴 𝘱𝘰𝘴𝘵 𝘪𝘴 𝘮𝘢𝘳𝘬𝘦𝘵𝘪𝘯𝘨 𝘤𝘰𝘮𝘮𝘶𝘯𝘪𝘤𝘢𝘵𝘪𝘰𝘯 𝘢𝘯𝘥 𝘪𝘴 𝘯𝘰𝘵 𝘢𝘯 𝘰𝘧𝘧𝘦𝘳 𝘰𝘳 𝘴𝘰𝘭𝘪𝘤𝘪𝘵𝘢𝘵𝘪𝘰𝘯 𝘰𝘧 𝘢𝘯𝘺 𝘰𝘧𝘧𝘦𝘳 𝘵𝘰 𝘵𝘳𝘢𝘥𝘦 𝘢 𝘧𝘪𝘯𝘢𝘯𝘤𝘪𝘢𝘭 𝘪𝘯𝘴𝘵𝘳𝘶𝘮𝘦𝘯𝘵. 𝘐𝘯𝘧𝘰𝘳𝘮𝘢𝘵𝘪𝘰𝘯 𝘰𝘯 𝘩𝘪𝘴𝘵𝘰𝘳𝘪𝘤𝘢𝘭 𝘱𝘦𝘳𝘧𝘰𝘳𝘮𝘢𝘯𝘤𝘦 𝘪𝘯𝘧𝘰𝘳𝘮𝘢𝘵𝘪𝘰𝘯 𝘪𝘴 𝘯𝘰𝘵 𝘪𝘯𝘥𝘪𝘤𝘢𝘵𝘪𝘷𝘦 𝘰𝘧 𝘧𝘶𝘵𝘶𝘳𝘦 𝘱𝘦𝘳𝘧𝘰𝘳𝘮𝘢𝘯𝘤𝘦 𝘰𝘳 𝘪𝘯𝘷𝘦𝘴𝘵𝘮𝘦𝘯𝘵 𝘳𝘦𝘵𝘶𝘳𝘯𝘴, 𝘵𝘩𝘢𝘵 𝘤𝘢𝘯 𝘣𝘦 𝘯𝘦𝘨𝘢𝘵𝘪𝘷𝘦. 𝘗𝘭𝘦𝘢𝘴𝘦 𝘤𝘰𝘯𝘴𝘶𝘭𝘵 𝘸𝘪𝘵𝘩 𝘺𝘰𝘶𝘳 𝘱𝘳𝘰𝘧𝘦𝘴𝘴𝘪𝘰𝘯𝘢𝘭 𝘢𝘥𝘷𝘪𝘴𝘰𝘳𝘴 𝘢𝘣𝘰𝘶𝘵 𝘵𝘩𝘦 𝘴𝘶𝘪𝘵𝘢𝘣𝘪𝘭𝘪𝘵𝘺 𝘰𝘧 𝘢𝘯 𝘪𝘯𝘷𝘦𝘴𝘵𝘮𝘦𝘯𝘵 𝘵𝘰 𝘦𝘯𝘴𝘶𝘳𝘦 𝘵𝘩𝘢𝘵 𝘺𝘰𝘶 𝘶𝘯𝘥𝘦𝘳𝘴𝘵𝘢𝘯𝘥 𝘪𝘵𝘴 𝘳𝘪𝘴𝘬𝘴. 𝘈 𝘴𝘶𝘮𝘮𝘢𝘳𝘺 𝘰𝘧 𝘪𝘯𝘷𝘦𝘴𝘵𝘰𝘳 𝘳𝘪𝘨𝘩𝘵𝘴 𝘢𝘴 𝘸𝘦𝘭𝘭 𝘢𝘴 𝘮𝘰𝘳𝘦 𝘪𝘯𝘧𝘰𝘳𝘮𝘢𝘵𝘪𝘰𝘯 𝘰𝘯 𝘵𝘩𝘦 𝘴𝘶𝘴𝘵𝘢𝘪𝘯𝘢𝘣𝘪𝘭𝘪𝘵𝘺 𝘢𝘴𝘱𝘦𝘤𝘵𝘴 𝘰𝘧 𝘵𝘩𝘦 𝘧𝘶𝘯𝘥 𝘤𝘢𝘯 𝘣𝘦 𝘰𝘣𝘵𝘢𝘪𝘯𝘦𝘥 𝘪𝘯 𝘌𝘯𝘨𝘭𝘪𝘴𝘩 𝘩𝘦𝘳𝘦: https://lnkd.in/dANYZzBP. 𝘋𝘢𝘯𝘴𝘬𝘦 𝘐𝘯𝘷𝘦𝘴𝘵 𝘔𝘢𝘯𝘢𝘨𝘦𝘮𝘦𝘯𝘵 𝘈/𝘚 𝘮𝘢𝘺 𝘥𝘦𝘤𝘪𝘥𝘦 𝘵𝘰 𝘵𝘦𝘳𝘮𝘪𝘯𝘢𝘵𝘦 𝘵𝘩𝘦 𝘢𝘳𝘳𝘢𝘯𝘨𝘦𝘮𝘦𝘯𝘵𝘴 𝘮𝘢𝘥𝘦 𝘧𝘰𝘳 𝘵𝘩𝘦 𝘮𝘢𝘳𝘬𝘦𝘵𝘪𝘯𝘨 𝘰𝘧 𝘪𝘵𝘴 𝘧𝘶𝘯𝘥𝘴.

While investors must consider various portfolio risks for 2024, we believe emerging market debt – particularly US dollar-denominated bonds issued by EM corporates – is well positioned to withstand those risks. Explore our investment convictions in our 2024 Outlook. https://lnkd.in/eQKDa4a2 #2024outlook #investing #emergingmarketsdebt

As most people know, I have a strong bias towards EM bonds.  With EM bonds in particular, it is really exciting to see what a big impact ESG has had on performance and risk over the last three years: higher performance with lower risk - worth considering and exchanging.

🌐 Global outlook for private debt & private equity: private(r) for longer? 📈 In our latest analysis, we delve into the key trends and insights shaping the private debt and private equity markets. The highlights: 🔹 Inflation and rising interest rates have tempered enthusiasm in private markets, leading to cautious investor sentiment and lower return expectations. However, private assets remain attractive to institutional and retail investors seeking higher yields, inflation hedging, reduced market volatility, and diversification. 🔹 Easing monetary policy and modest growth are expected to renew interest in private markets. Anticipated monetary policy easing later this year could stimulate private equity through improved valuations and renewed IPO activity. For private debt, a lower yield environment could enhance debt repayment capabilities and mitigate prolonged defaults. 🔹 Private debt has experienced significant growth, expanding by 60% to reach USD1.6tn in the last five years. It has transformed from a niche financing option for SMEs into a crucial element of the alternative investment scene. We anticipate continued growth, driven by liquidity premiums and returns, although some defaults in pro-cyclical sectors are likely. 🔹 Economic downturns and regime changes often create opportunities in private markets, especially for distressed debt. We've observed that the largest fundraising increases for distressed debt funds occurred during recession years. Europe is expected to see a greater volume of distressed companies, particularly SMEs facing imminent debt maturities. 🔹 Private equity continues to seek transformative growth agents such as AI, ESG, healthcare, platforms, and reshoring. Although recent market volatility has impacted PE activity, renewed earnings resilience and mega-trends suggest a rebound with improved valuations and an uptick in IPO activity. 🔹 As private assets become more accessible, the distinction between liquid and private assets may blur, potentially reducing the liquidity premium associated with private markets. However, during economic downturns and market volatility, the riskier nature of private assets is expected to emerge, resulting in underperformance compared to their traded counterparts. For a more detailed analysis, you can access the complete report here: https://lnkd.in/eDMjs8hE #PrivateDebt #PrivateEquity #InvestmentTrends #FinancialMarkets #ludonomics #allianztrade #allianz

We're thrilled to see our very own Ramkumar Narayanan featured in ImpactAlpha's latest article, "Emerging market debt investors debunk risk myths." 🌍💼 Ramkumar highlights how data reveals the strong performance of emerging market debt funds, dispelling misconceptions about their risk. "Investing in emerging markets with debt strategies is something that’s very low risk". Read the full article to learn more about how emerging market debt funds are driving impactful investments while maintaining strong returns: ImpactAlpha Article 🔗 https://lnkd.in/ed7JJ5zx #ImpactInvesting #EmergingMarkets #DebtFunds #SustainableFinance

A number of potential positives for emerging debt in 2024. After challenging flow dynamics is 2022 & 2023, is this the year that we see net inflows return to the asset class ?

A recent turnaround in EM debt performance could bring greater attention to all the underlying strengths of this asset class. A combination of factors are suggesting now could be the ideal time for adding new, or increasing existing, allocations to #EmergingMarket debt. Click to read what they are: https://okt.to/dA3Sat #Schroders #investing