Our approach

With over 20 years’ experience investing in emerging-market debt (EMD), we manage over $11 billion of assets (as at 31 March 2021) across a range of strategies that span the EMD universe; from pooled, hard-currency sovereign, hard-currency corporate and local-currency sovereign strategies, alongside a range of bespoke, long-only and total return solutions. 

We believe emerging debt markets are less efficient than developed debt markets and investment opportunities are created by the breadth and diversity of an under-researched and under-reported universe.

Our approach to EMD investing focuses on three key pillars:

No biases

In our view, there are long standing and significant structural biases within the EMD manager universe that leave investors overly exposed to the riskiest issuers. Our approach seeks to utilise the full breadth of opportunities, without any predetermined risk biases.

Deep understanding of EM risk

Emerging markets exhibit high levels of idiosyncratic risk and are characterised by periods of high volatility that many traditional risk metrics fail to capture. A deep understanding of emerging market specific risk, combined with a blend of traditional and non-traditional risk metrics, is crucial to delivering superior client outcomes.

Focus on portfolio construction

Our proprietary risk allocation process uses custom portfolio sectors to provide a clear separation between market and asset-specific, enabling portfolios to perform throughout the market cycle.

Potential benefits

Potential for attractive, sustainable returns from some of the world’s most dynamic economies.

Structural advantages

Taps into higher economic growth rates, lower debt and other factors such as positive demographics and rapidly expanding consumerism.

Diversification

EMD offers access to regions and countries across sovereign and corporate issuers in hard and local currencies. Each segment has unique risk and return drivers, helping to provide stable, diversified returns for investors.

Alpha opportunities

Inefficiencies within EMD creates opportunities for active managers to exploit across countries, issuers, yield curves and currencies.

Key risks

For further information on the risks and risk profiles of our funds, please refer to the relevant KIID and Prospectus.

The value of an investment and any income from it can go down as well as up and can fluctuate in response to changes in currency and exchange rates. Investors may not get back the original amount invested.

Emerging markets risk

The funds invest in emerging markets; these markets may be volatile and carry higher risk than developed markets.

Derivatives risk

The funds may use derivatives; these can be complex and highly volatile. Derivatives may not perform as expected, which means the fund may suffer significant losses.

Credit risk

Bond values are affected by changes in interest rates and the bond issuer's creditworthiness. Bonds that offer the potential for a higher income typically have a greater risk of default.

Illiquid securities risk

Certain assets held in the funds could, by nature, be hard to value or to sell at a desired time or at a price considered to be fair (especially in large quantities), and as a result their prices could be very volatile.

Emerging-market debt strategies

Strategies referred to may not be available in all jurisdictions.

Aviva Investors Emerging Markets Bond Strategy

This strategy aims to deliver positive and consistent excess returns throughout the market cycles by investing mainly in bonds issued by governments and corporations in emerging-market countries. It is benchmarked against the JP Morgan EMBI Global Index.

Uncorrelated alpha

Alpha generation that is uncorrelated to high-yield versus investment-grade spread differentials.

Smoother path of returns

Enhanced capital preservation results in a smoother path of returns compared to peers and the benchmark.

Consistent outperformance

A process that can generate positive excess returns throughout market cycles.

Aviva Investors Emerging Markets Local Currency Bond Strategy

This strategy aims to deliver positive and consistent excess returns throughout market cycles by investing mainly in the currencies of emerging-market countries and bonds issued by corporations and governments in these countries. It is benchmarked against the JP Morgan GBI-EM Global Diversified Index.

Clear separation of currency and duration decisions

Efficient management of currency volatility and opportunities.

Flexible process

Allowing for a blend of qualitative and quantitative proprietary indicators.

Aviva Investors Emerging Markets Corporate Bond Strategy

This strategy aims to deliver positive and consistent excess returns throughout market cycles by investing mainly in bonds issued by corporations in emerging-market countries. It is benchmarked against the JP Morgan CEMBI Broad Diversified Index.

Uncorrelated alpha

Alpha generation that is uncorrelated to high-yield versus investment-grade spread differentials.

Smoother path of returns

Enhanced capital preservation results in a smoother path of returns compared to peers and the benchmark.

Consistent outperformance

A process that can generate positive excess returns throughout market cycles.

Explore all funds

Access key fund documentation and performance reports.

View Fund Centre

Need more information?

For further information, please contact our investment sales team.

Contact us

Fixed income views