Schroders EMD's objective is to achieve high total long-term returns by diversifying its investments in fixed income securities denominated in local or foreign currency, issued or guaranteed in emerging debt markets by states, public bodies or companies in emerging debt markets.
Investment process
Schroders has developed a unique and effective approach for the emerging market debt market, which has generated high total returns with low volatility – even during the emerging market crises of 1997 and 1999. All Schroders emerging market fixed income funds aim to achieve high returns through appropriate portfolio diversification.
Schroders EMD is managed by a large team of professionals: four in London, one in Buenos Aires, and four in Asia (Hong Kong and Singapore). These professionals are part of Schroders' Fixed Income Analyst Team and work closely with economists, fund managers, and local analysts in emerging markets worldwide. All investment decisions for the SISF Emerging Markets Debt Fund are made in London.
Regarding emerging debt markets, Schroders is clear: there are plenty of opportunities; if you are an expert and master the investment technique, investing in emerging markets does not necessarily mean taking on added risk.
Schroders' investment method in these markets is perfectly defined. The objective is to obtain a total return (12%-15% per year in US dollars) over the medium term; therefore, any bond in which they invest must offer interest rates of approximately 15%.
Schroders maintains a comprehensive view of the markets, conducting regular portfolio reviews to identify factors influencing emerging market fixed income markets. This involves systematically analyzing all political, economic, and market events that could affect the countries in which the portfolio is held. Reviews are performed several times a year for countries with a larger weighting in the portfolio and at least once a year for underweight countries.
Schroders conducts personal visits to the countries, companies, and institutions in which it invests, holding meetings with their executives, advisors, fund managers, and national banks. This entire process is overseen by Schroders' Bond and Debenture specialists, who work closely with the Schroders EMD management team.
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