Sustainable Emerging Market Debt
Mobilising finance for sustainable transition
Sustainable Emerging Market Debt
Emerging markets corporates offer an interesting diversification proposition for investors looking for high carry, stable yield, and low portfolio turnover
In Focus
Our Philosophy
Unlike traditional emerging markets ESG funds that tend to focus on use-of-proceeds and labelled bonds (e.g., Green, Social, or Sustainability-linked bonds), we have created an Emerging Markets corporate bond strategy that takes a broader and more flexible approach, targeting companies with transformative sustainability goals and demonstrated business plans and ambitions. This strategy identifies companies with clear improvement potential; it selects investments that meet the high standards of SFDR Article 9, ensuring transparency, accountability, and alignment with the UN’s Sustainable Development Goals.
Why Sustainable Emerging Market Debt?
The strategy channels capital into promising emerging markets issuers that we believe to be future winners of global transition and change. With robust credit research, active engagement, and strategic capital allocation, we aim to drive meaningful and measurable impact in emerging markets—both environmental and social—and to deliver attractive long-term risk-adjusted returns.
- A high-growth, high-yielding and diversified investment opportunity in emerging markets corporates, leveraging a labour-intensive, engagement-based investment process
- A way to capture a significant portion of the improvement evolution (and the potential price appreciation) of these companies
- A low annual turnover rate (30-50 per cent annually), helping to protect investors from the transaction costs that are often associated with Emerging Markets investing
Key Risks
The value of investments and any income from them can go down as well as up and investors may not get back the amount originally invested.
ESG Investing Risk. The use of ESG criteria in the strategy’s investment process may cause the strategy to forgo investment opportunities available to other strategies that do not use these criteria, or to increase or decrease its exposure to certain sectors or types of issuers, which may negatively impact the strategy’s relative performance as compared to non-ESG strategies. Investing on the basis of ESG criteria is qualitative and subjective by nature and there can be no assurances that the process utilized by the Adviser will enable the strategy to meet its investment objectives.
Exchange Rate Risk Changes in currency exchange rates could reduce or increase investment gains or investment losses, in some cases significantly.
Counterparty Risk The possibility that the counterparty to a transaction may be unwilling or unable to meet its obligations.
Liquidity Risk is the risk that a Fund may encounter difficulties meeting its obligations in respect of financial liabilities that are settled by delivering cash or other financial assets, thereby compromising existing or remaining investors.
Operational Risk may subject the Fund to errors affecting transactions, valuation, accounting, and financial reporting, among other things.
Derivatives Risk Derivatives can behave unexpectedly. The pricing and volatility of many derivatives may diverge from strictly reflecting the pricing or volatility of their underlying reference(s), instrument or asset.
Emerging Markets Risk Emerging markets are less established, and often more volatile, than developed markets and involve higher risks, particularly market, liquidity and currency risks.
Interest Rate Risk When interest rates rise, bond values generally fall. This risk is generally greater the longer the maturity of a bond investment and the higher its credit quality.
Default Risk The issuers of certain bonds could become unwilling or unable to make payments on their bonds.
Credit Risk A bond or money market security could lose value if the issuer’s financial health deteriorates.
CoCo Bond Risk Contingent convertible securities (CoCo bonds) are comparatively untested, their income payments may be cancelled or suspended, and they are more vulnerable to losses than equities and can be highly volatile.
Further information on the potential risks can be found in the Key Investor Information Document (KIID) and/or the Prospectus of Offering Memorandum.