As part of its fund selector analysis feature on emerging market debt, Morningstar has identified the funds to watch based on their three-year performance.
Michael Cornelius has managed the T Rowe Price Emerging Markets Bond Fund since its inception in 2004. The fund mainly invests in USD-denominated sovereign emerging markets debt but may also hold quasi-sovereign and corporate debt. At the end of October 2016, the portfolio had 17% in corporate debt versus 0.09% for the JPM EMBI Global Diversified Index. The manager likes countries that are following reform agendas. In his view, Brazil, Jamaica and Venezuela fit this description.
The Ashmore Sicav EM Sovereign Debt Fund invests predominantly in hard currency emerging market sovereign and quasi-sovereign debt. It is managed by Ashmore’s EM debt team, driven by the investment committee’s views with portfolio managers also having analytical responsibilities. At the end of October 2016, the fund had 11.3% in Venezuela against 1.9% for the benchmark (JPM EMBI Global Diversified Index).
The Neuberger Berman EM Debt Hard Currency Fund was launched in May 2013 and has a focus on hard currency debt, primarily sovereign, in order to limit currency risk. The team focuses on bottom-up country selection, with top-down beta management, duration positioning and corporate allocation playing a secondary role.
