On 2^nd February 2017, following The Adviser Centre Monthly Review meeting on 18^th January 2017, First State Emerging Markets Bond has been added to our Recommended list.

Head of Emerging Market Debt, Helene Williamson leads a team of specialist investment managers and analysts.  Prior to joining First State in 2011 she worked at F&C Asset Management, where she was Head of Emerging Market Debt for 16 years.  The fund invests in emerging market debt with a focus on governments bonds denominated in US dollars.

At the heart of the investment philosophy is the belief that inefficiencies arise in emerging market debt markets due to structural imbalances between the size of the investor base and the size of the market making community, behavioural biases and competing investor agendas / investment horizons.  The team’s investment approach is rooted in objective and thorough assessments of market and country fundamentals and valuations, but also incorporates assessments of risk appetite and technical dynamics.  This ensures that they remain alive to opportunities that result from technical and sentiment-led mispricings.

Whilst being passionate about the long-term opportunities in the asset class, the team are well-versed in the challenges of investing in emerging debt markets.  They operate with a strong sense of risk, combining their valuation discipline with a desire to avoid country crises.  As a result, we would expect relative performance to be stronger during difficult periods for the asset class, as the team focuses on avoiding adverse credit events and adjusts the aggregate risk in the fund according to their broad outlook for the asset class.

As such, the fund is designed to appeal to investors who require exposure to dollar-denominated emerging markets bonds whilst seeking a degree of downside protection, within the confines of a long-only, benchmark-aware mandate.