High conviction investments. Diverse perspectives.
Our approach
Our approach
Pioneering emerging markets debt investors
Our first emerging markets debt investments were back in 1988 at the birth of the asset class. Today, the diverse opportunity set is made up of sovereign and corporate issuers across more than 60 countries.
While emerging markets are often treated as a homogeneous group, we take a different view and believe that understanding the differences across this diverse opportunity set is key to investment success.
Flexibly access this dynamic market
Our flexible and diverse approach seeks the best opportunities in this broad investment universe
Experienced and stable team
For over 20 years, our team have cultivated a deep understanding of emerging markets complexities
Driven by fundamental research
On-the-ground, fundamental research and local insights are combined with global macro analysis
The Capital SystemTM combines independent, high-conviction decision-making with the diversity that comes from multiple perspectives.
We believe ESG is key to successful investing. So we consider environmental, social and governance issues before we invest.
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Additional information on how this fund can help meet your clients’ needs
- Active approach that seeks to capture the full potential of an evolving market
Our active approach provides access to a wide source of returns, through exposure to some of the best opportunities outside of the index’s universe, capturing multiple markets and helping to mitigate risk.
- Extensive experience in uncertain times
Three decades of emerging markets debt investment experience leaves Capital Group well placed to navigate today’s heightened geopolitical risk and market volatility. Benefit from investment team stability, experience through crises and a long-term view.
- Research-driven philosophy
With an established bottom-up approach to security selection, the portfolios seek to drive consistent outcomes for investors. Applying the same rigorous analysis across sovereigns and corporates in emerging markets, these diverse portfolios aim to minimise volatility.
Emerging markets debt has broadened and matured significantly over the last few decades. As the asset class has developed, issuance has increased, and liquidity therefore improved.
By investing broadly, with an active approach, we can diversify currency, curve and maturity risk within local currency debt, and separate out dollar duration risk from credit risk within hard currency.
As markets continue to be volatile, your clients may be looking for a strategy that could navigate through market uncertainties. With Capital Group, benefit from:
- A broad, multi-faceted approach able to quickly adapt to an evolving environment
- Our bottom-up investment process, which assesses each investment opportunity on an individual basis
- Investment team stability and experience during periods of heightened geopolitical risk and market volatility
The investment objective of our emerging markets debt funds is to provide, over the long term, a high level of total return, of which current income is a significant component.
What are our top priorities as we build the portfolio?
- Find diversified opportunities among attractively priced markets based on fundamental research
- Seek high real yields, which are rare globally
- Provide diversification across countries, currencies and corporates
Invested capital is at risk; the funds aim to achieve a positive return over the long term although there is no guarantee this will be achieved over that or any time period.
A distinctive investment process
Analysts lead on-the-ground research with in-person engagement and invest in their best ideas to signal convictions.
Experience and stability
Highly experienced team of portfolio managers with an average of 32 years’ experience in emerging markets.
Multi-level risk management
Independent risk team consider investment, operational and strategy-level risks, and prepare scenario analysis to inform portfolio construction.
Taking the long view
We base our investment decisions on a long-term perspective, aligning our goals with the interests of your clients. Superior, long-term returns are our goal. The Global Corporate Bond investment team is rewarded for their results, not the level of assets they manage.
Breadth of experience
Our process enables individual investment professionals to act on their highest convictions while limiting the risk associated with isolated decision-making. We draw on their diverse expertise and experience to build the portfolio.
Deep, fundamental research
Few firms can match the scale and scope of our proprietary research. Investment analysts conduct thousands of research visits globally every year. This research is then combined with comprehensive macro analysis. This approach has been essential to the results we have delivered to our investors.
Capital Group manages equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organisation; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.
WHY CAPITAL GROUP
A leader in global investing
For more than 90 years, we’ve been searching the world for long-term opportunities, making Capital one of the oldest global investors today.
Global investing credentials
*Assets under management by Capital Fixed Income Investors. Data as of 31 December 2025
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Fund risks
Capital Group Emerging Markets Local Currency Debt Fund (LUX)
Bond Connect risk: Investments in Chinese onshore bonds traded on CIBM via Bond Connect are subject to various risks associated with clearing and settlement, as well as liquidity, regulatory and counterparty risks.
Bonds risk: The value of bonds can change as a result of interest rate changes – typically when interest rates rise, bond values fall. Funds investing in bonds are exposed to credit risk. A decline in the financial health of an issuer could cause the value of its bonds to fall or become worthless.
China IBM risk: The fund may investment on the China Interbank Bond Market. This market can be volatile and subject to liquidity constraints due to low trading volumes. As a result, the price of debt securities traded on this market can fluctuate significantly, spreads may be large, and realisation costs may be significant.
Counterparty risk: Other financial institutions provide services to the fund such as safekeeping of assets, or may serve as a counterparty to financial contracts such as derivatives. There is a risk the counterparty will not meet their obligations.
Derivative instruments risk: Derivatives are financial instruments deriving their value from an underlying asset and may be used to hedge existing exposures or to gain economic exposure. A derivative instrument may not perform as expected, may create losses greater than the cost of the derivative and may result in losses to the fund.
Emerging markets risk: Investments in emerging markets are generally more sensitive to risk events such as changes in the economic, political, fiscal and legal environment.
Liquidity risk: In stressed market conditions, certain securities held by the fund may not be able to be sold at full value, or at all. This could cause the fund to defer or suspend redemptions of its shares, meaning investors may not have immediate access to their investment.
Operational risk: The risk of potential loss resulting from inadequate or failed internal processes, people and systems or from external events.
Sustainability risk: Environmental, social or governance event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of an investment of the fund.
Fund risks
Capital Group Emerging Markets Debt Fund (LUX)
Bond Connect risk: Investments in Chinese onshore bonds traded on CIBM via Bond Connect are subject to various risks associated with clearing and settlement, as well as liquidity, regulatory and counterparty risks.
Bonds risk: The value of bonds can change as a result of interest rate changes – typically when interest rates rise, bond values fall. Funds investing in bonds are exposed to credit risk. A decline in the financial health of an issuer could cause the value of its bonds to fall or become worthless.
China IBM risk: The fund may investment on the China Interbank Bond Market. This market can be volatile and subject to liquidity constraints due to low trading volumes. As a result, the price of debt securities traded on this market can fluctuate significantly, spreads may be large, and realisation costs may be significant.
Counterparty risk: Other financial institutions provide services to the fund such as safekeeping of assets, or may serve as a counterparty to financial contracts such as derivatives. There is a risk the counterparty will not meet their obligations.
Derivative instruments risk: Derivatives are financial instruments deriving their value from an underlying asset and may be used to hedge existing exposures or to gain economic exposure. A derivative instrument may not perform as expected, may create losses greater than the cost of the derivative and may result in losses to the fund.
Emerging markets risk: Investments in emerging markets are generally more sensitive to risk events such as changes in the economic, political, fiscal and legal environment.
Liquidity risk: In stressed market conditions, certain securities held by the fund may not be able to be sold at full value, or at all. This could cause the fund to defer or suspend redemptions of its shares, meaning investors may not have immediate access to their investment.
Operational risk: The risk of potential loss resulting from inadequate or failed internal processes, people and systems or from external events.
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.
- Past results are not a guarantee of future results.
- 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. Currency hedging seeks to limit this, but there is no guarantee that hedging will be totally successful.
- Some portfolios may invest in financial derivative instruments for investment purposes, hedging and/or efficient portfolio management.
- There are additional risks associated with these funds. See fund risks for more information.