Menu
Investment expertise

Emerging markets fixed income

The emerging market fixed-income space remains an under-researched asset class that offers attractive alpha opportunities. Active management, based on thorough, fundamental country and credit research and a combination of top-down allocation and bottom-up selection, is, in our view, the best investment approach to uncover and take advantage of market inefficiencies. In addition, we pay particular attention to liquidity, diversification and risk management.



Investment case and philosophy

The emerging market (EM) fixed-income space remains an under-researched asset class that offers attractive alpha opportunities. Active management, based on thorough, fundamental country and credit research and a combination of top-down allocation and bottom-up selection, is, in our view, the best investment approach to uncover and take advantage of market inefficiencies. In addition, we pay particular attention to liquidity, diversification and risk management.

Within EM fixed income, we believe that EM corporate bonds remain an investment of choice and a good addition to a traditional global fixed-income portfolio, thanks to the following features:

  • Access to the fastest-growing regions in the world
  • Attractive valuations
  • Strong risk-adjusted returns
  • Limited correlation to other traditional fixed-income asset classes

For investors with a lower risk appetite or specific regulatory constraints, EM investment-grade corporate bonds are the best way to enter the asset class.

For investors with greater risk appetite, the overall EM corporate bond market offers the best return potential, provided the management process includes thorough issuer selection and diversification to help protect the portfolio against idiosyncratic risk.

Investment team

The EM fixed-income team comprises eight highly experienced investment professionals, including in-house sovereign and corporate research analysts.

UBP’s Emerging Markets team has sizeable assets under management, totalling over USD 2.7 bn as at September 2016.

Industry recognition

  • Emerging Markets Manager of the Year – European Pensions Awards 2014 
  • Fixed Income Manager of the Year – Emerging Markets – Global ISF Investor’s Excellence Awards 2015 
  • UBAM FCP – EM Investment Grade Corporate Bond Fund: Winner of Asset View Awards 2016 – Emerging 
  • UBAM – Emerging Market Corporate Bond Fund -RC- USD: – I Migliori 300 Fondi – 2016 – Italy

Investment process

There are three key elements to building and managing the portfolio:

1 - GLOBAL MARKET TRENDS

  • Global business cycle
  • Risk appetite
  • G3 monetary policies
  • Commodities
Portfolio's key metrics (e.g. duration, beta, etc.) & allocation

2 - FUNDAMENTAL COUNTRY ANALYSIS

  • Quantitative and qualitative analysis (Country Scores)
  • Dynamic and short-term outlook
Country target positioning

3 - FUNDAMENTAL CREDIT ANALYSIS AND RELATIVE VALUE

  • Credit analysis: reviews of issuers, peer group
  • Relative value analysis: comparison accross countries and sectors
Issuer and Bond Recommendation

► Portfolio Construction & Risk Monitoring

Investment products

UBP’s Emerging Markets team offers a wide and innovative product range, including:

  • Three EM corporate bond strategies:
    1. Core
    2. Investment Grade and
    3. High Yield Short Duration
  • Total return and EM fixed-income multi-asset strategies
  • Interest rate duration-hedged share classes

About two thirds of our assets under management are invested in emerging fixed income through bespoke mandates for institutional clients.

Risk warning

Despite the interesting potential that emerging markets have, investment in such markets entails a risk that is higher than in developed economies: it should only be considered by investors who have sufficient knowledge of financial markets and who are willing to take more risks.

Learn more about our three emerging corporate debt funds
EMERGING debt

Unlock the value of emerging debt

Learn more about our expertise on emerging debt

Watch the video
Our fund range

Funds

View all our funds.

Read more

Institutional clients

With a team of more than 200 people, UBP Asset Management has built an on-the-ground presence in the world’s major markets through organic growth and selected partnerships.

Insight 20.04.2017

Investment Outlook Q2 2017

Sustained and synchronised growth: world growth continues on a positive trajectory in Q2, driven by the positive trend in place in the US, sustained activity in Asia and a more constructive outlook for the Eurozone. Growth looks to be sustained and synchronised across the main regions, thanks to firmer activity in the manufacturing sector and a positive trend in consumption.