Emerging markets are less dependent on exports and are less likely to default than they used to be. They also have more prudent macroeconomic policies and stronger balance sheets
Developing countries are becoming less dependent on the developed world as their economies diversify and consumer spending habits evolve
Emerging markets debt should benefit from rising growth differentials between the developing and developed world
We expect solid growth from the asset class over the next three to five years
Benefits to investors
Local currency emerging markets debt has explicit exposure to currency and interest rate dynamics that can be actively managed, widening the opportunity set and offering significant diversification from hard currency emerging markets debt and other major asset classes
Local currency debt can be a natural hedge against developed market currencies. Forecast weakness in the dollar and euro suggests now is an opportune time to invest in emerging markets local currency bonds
Local currency debt is often higher credit quality than hard currency debt
Returns on emerging markets local currency debt have historically been higher than hard currency emerging market debt relative to the level of volatility
An unconstrained approach investing across the entire emerging markets debt local currency universe, identifying the best opportunities available and creating diversified portfolios
Why Aberdeen for Emerging Markets Local Currency?
A proven track record of investing in emerging markets debt across a series of market cycles
A dedicated, stable and experienced team of EMD specialists → We are embedded into a large fixed income department, which offers access to its resources in terms of macro research → We have been managing emerging markets debt since 1994
A forward looking approach to risk as VAR does not always work in EMD
We have no capacity constraints
We strongly believe that our combined years of experience and well-resourced team are a vital part of our process
Aberdeen has a strong global emerging equity presence, which gives us insight into companies on a micro level and how the collective performance of a number of corporates in a country can impact the country’s macroeconomic performance
