The Invesco Emerging Market Local Debt Fund has reached USD1.07 billion in assets under management. The fund is managed by Invesco’s Global Multi-Sector Debt team, which manages over USD8 billion in fixed income assets including over USD2.5 billion in emerging markets debt, one as part of Invesco’s global fixed income franchise that has USD300 billion-plus of assets.
The fund is managed by Hemant Baijal, Head of Multi-Sector Portfolio Management, Global Debt and Wim Vandenhoeck, Senior Portfolio Manager. Both portfolio managers joined Invesco with the acquisition of Oppenheimer in May 2019.
Invesco attributes the fund’s success to investors looking for exposure to the opportunities present in the emerging markets asset class, with a manager who has demonstrated sustained alpha generation of approximately +200bps in every calendar year since the inception of the strategy, while not exceeding the volatility of its benchmark on an ex-ante basis. The global debt team’s collaborative approach draws on the experience of its 11 investment professionals who have a long, successful history of investing in international fixed income, dating back to the mid-1990s. Invesco believes by having such a diverse team from international backgrounds, including fluency in over 20 languages, helps inform an interconnected global perspective and has contributed to the fund’s success.
Hemant Baijal, Fund Manager, says: “This strategy is a global macro discretionary strategy and we strongly believe it is essential to understand global conditions to invest in emerging markets. In order to generate alpha for our clients, we look at each country’s nuances individually, to determine what we believe will be the growth path over the nine-18 months.
“We believe that global macro conditions and a shift in central bank frameworks are setting the stage for a possible sustained outperformance of emerging market assets over the next three to five years. The changing policy framework at the US Federal Reserve should also ensure that financial conditions in the US remain favourable for a self-sustaining emerging market cycle.
“Improving global growth conditions and a weaker US dollar increases the attractiveness of this asset class, especially for investors in developed markets who are facing a decade of close to zero nominal returns.”
Wim Vandenhoeck, Senior Portfolio Manager, says: “Our goal is to maximise alpha generation with mitigated downside risk to our investors in an asset class that currently enjoys attractive income and capital appreciation opportunities.
“By allocating, in general, an ex-ante amount of risk equal to or lower than the long-term reference benchmark volatility, we believe we have been able to provide alpha with mitigated downside risk over three and five year periods.”
The Invesco Emerging Market Local Debt Fund’s objective is to generate income, together with long term capital growth. The fund seeks to achieve its objective by investing a minimum of 80 per cent of its NAV in debt securities of issuers that are economically tied to emerging market countries and which are denominated in local currencies.
