Emerging Markets Local Debt – why this time might be different

Within Insights we provide you with a deeper understanding of our investment philosophy and thinking.

EM local debt – standing out in difficult times

The EM debt asset class is off to one of its roughest starts of the year in recent history. At the beginning of the year continuously rising global rates, led by US Treasury yields, were the key driver for the absolute negative performance in EM debt. The threat of much earlier-than-expected monetary tightening and the withdrawal of pandemicera stimulus in the US, together with growth concerns in China soured EM investors’ sentiment further. Adding to these considerable endogenous burdens already weighing on EMD, the asset class was confronted with an additional substantial geopolitical shock in Russia’s military action in Ukraine, which could not only catalyse stagflationary impulses (i.e. lower or no growth, accompanied with much higher than expected inflation) in many countries, but also cause serious structural damage to risk appetite for EM debt.

Read our detailed Spotlight analysis here



Author

Robert Reichle

Robert Reichle, CFA, CQF joined Berenberg as a senior portfolio manager in January 2010. As a member of the fixed income selection team he is responsible for the creation and implementation of global fixed income portfolio management strategies. He has expertise in emerging markets debt, global government bonds, as well as corporates and financials. He is also the lead manager of the Berenberg mutual funds Emerging Markets Bond Selection, Global Bond Selection, and EUR Government Bond Selection. Robert has been working in the financial sector since 2004. Before joining Berenberg he was a senior strategist and portfolio manager at Payden & Rygel in Los Angeles and he also worked at WestLB AG, London as a manager in Emerging Markets credit derivatives trading and structuring. Robert is a Chartered Financial Analyst (CFA), received the CQF designation, and also has a German Diplom in economics from the University of Ulm and a Master in international economics from the University of Pantheon-Sorbonne, Paris.

Head of Fixed Income Global & Emerging Markets

Fixed Income

Active investment approach in Emerging Markets bonds

Fundname
ISIN | WKN:
Performance
1 year
Volatility
1 year
NAV

Berenberg EM Bonds R D

DE000A1C2XK8 | A1C2XK
Date: 26.09.2022
ISIN: DE000A1C2XK8
WKN: A1C2XK
Performance 1 year: -18.42%
Volatility 1 year: 10.83%
NAV: 70.81 EUR

Berenberg Sustainable EM Bonds R

LU1725429309 | A2H8YS
Date: 26.09.2022
ISIN: LU1725429309
WKN: A2H8YS
Performance 1 year: -17.32%
Volatility 1 year: 5.70%
NAV: 76.37 EUR