OUR APPROACH
Pioneering emerging markets debt investors
Our first emerging markets debt investments were back in 1988 at the birth of the asset class. Today, the diverse opportunity set is made up of sovereign and corporate issuers across more than 60 countries.
While emerging markets are often treated as a homogeneous group, we take a different view and believe that understanding the differences across this diverse opportunity set is key to investment success.
Flexibly access this dynamic market
Our flexible and diverse approach seeks the best opportunities in this broad investment universe
Experienced and stable team
For over 20 years, our team have cultivated a deep understanding of emerging markets complexities
Driven by fundamental research
On-the-ground, fundamental research and local insights are combined with global macro analysis
THINGS TO CONSIDER
Investing long term by looking past short-term noise
During uncertain times, investment team stability, experience through crises, and a long-term investment horizon can help investors navigate difficult market environments.
Risk considerations
ROUTES INTO EM DEBT
Options for both focused and diversified exposure
Depending on your client's objective, select a blended approach for broader market opportunities, or focus on local currency only for structural diversification and potentially higher real yields.
Blending hard and local currency opportunities offers diversification across the broader market, and a blended portfolio could adapt to changing market environments more rapidly. This strategy integrates investment-led ESG considerations as well as specific ESG and norms-based screens.1
As emerging markets mature, it opens up the potential for these countries to issue local currency debt. Structural currency appreciation and high real yields could offer an attractive risk-reward trade-off. This fund integrates investment-led ESG considerations as well as specific ESG and norms-based screens.1
High conviction investments. Diverse perspectives.
The Capital SystemTM is designed to produce highly diverse portfolios that deliver consistent long-term results, a smoother ride and management continuity over a range of market conditions.
We believe ESG is key to successful investing. So we consider environmental, social and governance issues before we invest.
Let's kickstart your client conversation
Additional information on how this fund can help meet your clients’ needs
- Active approach that seeks to capture the full potential of an evolving market
Our active approach provides access to a wide source of returns, through exposure to some of the best opportunities outside of the index’s universe, capturing multiple markets and helping to mitigate risk. - Extensive experience in uncertain times
Three decades of emerging markets debt investment experience leaves Capital Group well placed to navigate today’s heightened geopolitical risk and market volatility. Benefit from investment team stability, experience through crises and a long-term view. - Research-driven philosophy
With an established bottom-up approach to security selection, the portfolios seek to drive consistent outcomes for investors. Applying the same rigorous analysis across sovereigns and corporates in emerging markets, these diverse portfolios aim to minimise volatility.
Emerging markets debt has broadened and matured significantly over the last few decades. As the asset class has developed, issuance has increased, and liquidity therefore improved.
By investing broadly, with an active approach, we can diversify currency, curve and maturity risk within local currency debt, and separate out dollar duration risk from credit risk within hard currency.
As markets continue to be volatile, your clients may be looking for a strategy that could navigate through market uncertainties. With Capital Group, benefit from:
- A broad, multi-faceted approach able to quickly adapt to an evolving environment
- Our bottom-up investment process, which assesses each investment opportunity on an individual basis
- Investment team stability and experience during periods of heightened geopolitical risk and market volatility
The investment objective of our emerging markets debt funds is to provide, over the long term, a high level of total return, of which current income is a significant component.
What are our top priorities as we build the portfolio?
- Find diversified opportunities among attractively priced markets based on fundamental research
- Seek high real yields, which are rare globally
- Provide diversification across countries, currencies and corporates
Invested capital is at risk; the funds aim to achieve a positive return over the long term although there is no guarantee this will be achieved over that or any time period.
A distinctive investment process
Analysts lead on-the-ground research with in-person engagement and invest in their best ideas to signal convictions.
Experience and stability
Highly experienced team of portfolio managers with an average of 32 years’ experience in emerging markets.
Multi-level risk management
Independent risk team consider investment, operational and strategy-level risks, and prepare scenario analysis to inform portfolio construction.
Taking the long view
We base our investment decisions on a long-term perspective, aligning our goals with the interests of your clients. Superior, long-term returns are our goal. The investment teams are rewarded for their results, not the level of assets they manage.
Breadth of experience
Our process enables individual investment professionals to act on their highest convictions while limiting the risk associated with isolated decision-making. We draw on their diverse experience to build the portfolio.
Deep, fundamental research
Few firms can match the scale and scope of our proprietary research. Investment analysts conduct thousands of research visits globally every year. This research is then combined with comprehensive macro analysis. This approach has been essential to the results we have delivered to our investors.
WHY CAPITAL GROUP
A leader in global investing
For more than 90 years, we’ve been searching the world for long-term opportunities, making Capital one of the oldest global investors today.
Global investing credentials
US$2.5T
in total assets managed
26 years
average investment experience of our fixed income portfolio managers
US$498.0B
Fixed income assets managed*
*Assets under management by Capital Fixed Income Investors.
Data as at 31 December 2023
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