May 3, 2023 | Emerging Markets Debt
Our Edge In Emerging Markets Debt

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https://youtu.be/_BFWsg5d8xk?si=Rac4PXmXrd2nL8HN
Transcript
While we believe that overall market conditions remain favorable for emerging markets debt, the pandemic created idiosyncratic risks and diverging prospects across emerging markets countries.
Therefore, it is critical to have a clear understanding of the risks and opportunities they represent.
Leveraging on our rigorous bottom-up sovereign and corporate credit analysis and many years of experience investing in emerging markets debt, we believe we are well prepared to navigate these opportunities and risks, providing the potential to generate alpha for our clients.
We are fundamental emerging markets debt investors. We have a strong focus on risk management and diversification. To manage concentration risk, our country allocations are well diversified.
We seek alpha in all corners of the emerging markets debt universe. We have a focus on high-yielding frontier markets debt, where we think the risk premium tends to be fundamentally mispriced. We also have a structural overlay to select corporate debt.
Investing in emerging markets debt is about properly assessing risk. We have seen risks playing out from geopolitics, ESG, and other country-specific perspectives.
In order to better assess and manage risks, we segment the universe in three buckets based on different risk profiles: high-beta countries, medium-beta countries, and low-beta countries.
We believe that properly allocating and managing risks throughout these risk buckets improve our ability to generate consistent risk-adjusted returns over time.
Filmed July 2021
The views and opinions expressed herein are those of the speaker(s) as of the date of publication, are subject to change without notice as economic and market conditions dictate, and may not reflect the views and opinions of other investment teams within William Blair. Factual information has been obtained from sources we believe to be reliable, but its accuracy, completeness, or interpretation cannot be guaranteed. This material may include estimates, outlooks, projections, and other forward-looking statements. Due to a variety of factors, actual events may differ significantly from those presented. This video has been provided for informational purposes only and should not be considered as investment advice or a recommendation of any particular strategy or investment product, or as an offer to buy or sell any securities or related financial instruments in any jurisdiction. Investment advice and recommendations can be provided only after careful consideration of an investor’s objectives, guidelines, and restrictions. Investing involves risks, including the possible loss of principal. Investing in foreign denominated and/or domiciled securities may involve heightened risk due to currency fluctuations, and economic and political risks. These risks may be enhanced in emerging markets. Investing in the bond market is subject to certain risks including market, interest rate, issuer, credit, and inflation risk. Rising interest rates generally cause bond prices to fall. Sovereign debt securities are subject to the risk that an entity may delay or refuse to pay interest or principal on its sovereign debt because of cash flow problems, insufficient foreign reserves, or political or other considerations. High-yield, lower-rated, securities involve greater risk than higher-rated securities; portfolios that invest in them may be subject to greater levels of credit and liquidity risk than portfolios that do not. Individual securities may not perform as expected or a strategy used may fail to produce its intended result. Different investment styles may shift in and out of favor depending on market conditions. Diversification does not ensure against loss. Any investment or strategy mentioned herein may not be suitable for every investor. Past performance is not indicative of future results.
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