Standard Life Investments announces new EMD fund

Edinburgh-based Standard Life Investments has launched a fourth strategy in the suite of Emerging Market Debt (EMD) products it currently has available to retail and institutional investors.

The Emerging Market Debt Unconstrained Fund is to be co-managed by Richard House and Kieran Curtis who between them have 34 years of experience in managing EMD portfolios.

The new fund will complement the existing Emerging Market hard currency and local currency debt funds which have produced top decile peer group performance since inception and the Emerging Market Corporate Bond SICAV which, since inception, has produced 12th percentile performance. (Source: Mercers as at 31st December 2014)

Adhering to the company’s Focus on Change investment philosophy, the manager has an opportunity set of more than 70 countries in which to invest covering hard and local currency sovereign debt and emerging market corporates. The investment approach will be highly selective in building a portfolio of best ideas from each segment of the asset class, irrespective of a benchmark weighting, thus allowing the greatest potential for maximising risk-adjusted returns and building a genuinely diverse portfolio within a risk controlled framework.

Richard House, head of emerging markets fixed income at Standard Life Investments, said: “The EM debt opportunity set has grown significantly and now includes over 70 countries across three distinct subsets: hard and local currency sovereign debt plus hard currency corporate bonds. The EMD asset allocation decision has therefore become more complex with investors less willing or able to monitor and assess the merits of each subset. We believe that devolving responsibility to a manager who adopts an unconstrained approach is the most effective way of exploiting, within a single portfolio, the best opportunities that exist across the subsets of the asset class.

While the fundamental backdrop is sound for most EM countries, it is important to recognise that this is not universally the case. The lack of an index constraint is also designed to help avoid exposure to or to take short positions in countries which may be experiencing macroeconomic challenges and where asset price performance is expected to be poor.”

Richard House leads a team of five emerging market debt specialists with over 60 years’ industry experience between them.

The team uses a distinctive research-driven top-down view, alongside market insights and detailed country analysis to build a portfolio of best investment ideas and opportunities, working closely with our 40 strong fixed income team and GEM equities team.