We believe our multi-dimensional, disciplined EM debt approach can/may help generate strong risk-adjusted returns for clients. We seek to achieve this by combining macroeconomic research with fundamental country and credit analysis. We aim to:
- Exploit changing market cycles by actively rotating substrategies, for example, tilting the portfolio toward corporate debt, sovereign debt or local debt at opportune times
- Uncover market inefficiencies and investment opportunities through fundamental research
- Allocate strategy and location risk judiciously
- Align accounts with dedicated portfolio managers to help ensure performance accountability
- Identify and extract value by utilizing local portfolio management and leveraging resources from across our globally integrated network
Our EM Debt strategy is implemented in three key steps:
Global view: Our dedicated emerging markets experts convene regularly to discuss and assess big picture global macro factors that impact risk/reward relationships across emerging markets. This includes insights from J.P. Morgan's other fixed income, equity and global multi-asset teams.
Country analysis: From there, our global strategists analyze specific emerging and frontier market countries using quantitative screens (such as our proprietary Country Fundamental Index Model), as well as qualitative inputs from on-site country experts. The most attractive risk/reward locations are identified after consideration of comprehensive factors, including solvency, economic strength, political risk, fiscal position, business sentiment, institutional strength, business cycle, liquidity and government policy. This analysis helps determine country allocations within the overall portfolios.
Security selection: Using the macro and country analyses as initial screens, our team can then focus on the fundamental analysis of individual securities. This team excels at uncovering inefficiencies that can be exploited to capture alpha. Our team has a particular focus in identifying undervalued securities with favorable risk/reward tradeoffs across the spectrum of EM debt asset class.