Standard Life Investments has launched an emerging market debt (EMD) fund with an unconstrained approach, as its fourth EMD product after hard currency, local currency and corporate bond funds.
The fund will be co-managed by Richard House and Kieran Curtis, who have a combined 34 years of experience in managing EMD assets. The fund will cover 70 countries, and have the scope to use EM local currency and hard currency sovereign debt, as well as EM corporate debt. The fund will aim to use the best ideas from each different segment, to create a diversified portfolio with the maximum risk-adjusted return. Standard Life Investments head of emerging markets fixed income, Richard House, commented: “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.” Because of the unconstrained approach, the fund is not tied to an index. House said that this would help the fund avoid exposure to countries experiencing macro-economic challenges or where the asset price performance is expected to be poor.