Emerging Markets Local Currency Debt | Capital Group

 

Emerging Markets Local Currency Debt

As emerging markets mature, it opens up the potential for these countries to issue local currency debt, in turn building out a valuable sub-asset class for investors. With each of these countries at different stages of monetary and fiscal cycles at any given time, an investment in the local currency bonds could offer an attractive risk-reward trade-off for investors seeking diversification.

 

 


Capturing opportunities in an evolving market

 
In order to capture the full potential of the evolving local currency market, we invest in corporates and non-index* countries when identifying compelling opportunities.


Research-driven philosophy

On-the-ground fundamental research from local analysts is always our starting point. Our investment approach is constructed from selecting from the broadest possible investible universe, which allows for greater sources of alpha and a greater level of diversification.


Experience from a pioneer in emerging market investing

Our emerging market investment professionals have been working together for over 20 years and have developed a deep understanding of the market complexities in EMD, having first invested in 1990.
 
In this podcast, Capital Group’s fixed income director and OMFIF’s economist discuss how investors could approach investing in emerging market debt, and US Federal Reserve’s policy response to the recent market volatility.

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“We often invest in new markets early in their development and we invest when we see an attractive risk-return, not simply because a country is in the index. This means we typically look quite different to the index*.”

Kirstie Spence, Portfolio Manager

 

Investment insights

Our research-led investment thinking on emerging market.

Volatility in 2020: What it means for emerging market debt

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Digging deeper into emerging market debt

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Emerging markets: Over 30 years in the making

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The role of inflation-linked bonds in a disinflationary EM environment

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Capital Group Emerging Markets Local Currency Debt

Capturing opportunities in an evolving asset class

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*Compared to JPM GBI-EM Global Diversified.
The information in relation to the index is provided for context and illustration only. The fund is an actively managed UCITS. It is not managed in reference to a benchmark.

Past results are not a guide to future results. Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. The information provided is not intended to be comprehensive or to provide advice
 
Risk factors you should consider before investing:
  • This material is not intended to provide investment advice or be considered a personal recommendation. 
  • The value of investments and income from them can go down as well as up and you may lose some or all of your initial investment.
  • If the currency in which you invest strengthens against the currency in which the underlying investments of the fund are made, the value of your investment will decrease.
  • Depending on the strategy, risks may be associated with investing in fixed income, emerging markets and/or high-yield securities; emerging markets are volatile and may suffer from liquidity problems.