Emerging Markets

Key characteristics: • Qualitative research enhanced by quantitative analytics • Asset type agnostic, relative-value approach • Diverse and experienced team

Emerging Markets Overview

The Emerging Markets team has over 20 years of experience navigating business cycles across emerging markets and striving to capitalize on market dislocations. Portfolios are managed using a team-based approach that draws on the fundamental research of our robust global research platform, including a dedicated sovereign and emerging markets research team. Using a disciplined and repeatable investment process, the investment team’s long-term perspective focuses on outperforming the benchmark over full market cycles and delivering competitive risk-adjusted returns. 

Aegon AM US Emerging Markets Strategies

Strategy

AuM*

Inception date

Emerging Markets Debt Global Diversified $602 million April 1, 2006
Emerging Markets Debt Blended $45 million November 1, 2016

*As of June 30, 2020

Philosophy

Emerging markets portfolios are managed according to three main guiding principles. We believe:

  • Country selection is the largest driver of returns. Therefore we opportunistically allocate across countries first, and issuers and securities second.
  • Asset prices deviate from fundamental value. As such, we conduct rigorous analysis on the interaction of fundamentals and price. This includes disciplined relative-value analysis at the country, issuer and security levels. 
  • Markets over- and underreact to new information. We balance the long-term structural path for each country with market sentiment to help oscillate risk within the portfolio. 

 

Investment Process

The investment process starts with a top-down, fundamental evaluation of the individual emerging market countries in the investment universe. This process is informed by the internal, global house view. The team then compares its understanding of these fundamentals with sovereign pricing and further down to security level pricing. 

 

Distinguishing Characteristics 

The emerging market debt strategies benefit from our in-depth resources, relative-value approach, and experienced research team. Specifically, the strategy is differentiated from its peers in three key areas:

  • Qualitative research enhanced by quantitative analytics. Applying both a qualitative and quantitative perspective to our research, cognitive biases are minimized in our research. Quantitative analytics complement our qualitative assessment of countries' economic strength.
  • Asset type agnostic, relative-value approach. We believe that country performance will typically be the largest driver of portfolio returns. Therefore we opportunistically allocate across countries first and issuers and securities second. To best express our country allocations, our research team focuses on a broad range of securities across markets and issuers to best express our country view.
  • Seasoned & experienced team. The firm has been actively investing in emerging markets since the early 1990s with a dedicated emerging market debt team in place since 1999. The portfolio managers bring diverse backgrounds and many years' experience to the team, including a number of years of working or studying in emerging market countries. The portfolio managers are supported by the dedicated Emerging Markets Research team which also brings a multi-faceted, analytical research rigor to the firm's investment strategies. Finally, the ability to leverage the sector specialists from the broader credit research group and the dedicated Distressed Research team, complements the research depth and perspectives available to the team.