The FSA Spy market buzz – 1 November 2024
Battleshares’ old versus new, Goldman Sachs’ Cassandra warning, Hong Kong property’s negative equity woes, Ninety One’s trillion-dollar question, Contrarian alert from CB, Lists and much more.
HEAD-TO-HEAD: Ashmore vs Templeton
FSA compares two global emerging market bond funds: the Ashmore Sicav Emerging Markets Total Return Fund and the Templeton Emerging Markets Bond Fund.
Asia’s investors have been under-allocated to global emerging market debt, but the higher yield has sparked interest, according to Roger Bacon, Citi Private Bank’s head of investments for Asia-Pacific.
“This is an asset class that high net worth clients in Asia have not historically been allocating to, and we made a big call [to offer the asset class] at the beginning of [2016].”
He continues to see large allocations to EM debt, especially since performance has been strong in 2016 and this year.
Generally, industry researchers are positive on the asset class in 2018.
For example, Latin American bonds can be an attractive source of yield in the low interest rate environment, according to Guilllermo Felices, senior market strategist at BNP Paribas Asset Management.
Garcia Zamora, leader of the emerging market debt team at Standish Mellon, a specialist asset management boutique under BNY Mellon, believes that emerging market local currency sovereign bonds are the best fixed income products.
“Their valuations are more attractive [and the exchange rate] context is very constructive. If the dollar goes down, emerging markets currencies will go up and the returns of local currency bonds in dollar or euro terms will be more attractive than those of hard currency bonds.”
Against this backdrop, Vanessa Broussard, London-based fund analyst at Allfunds Bank, compares two global emerging markets blended funds: the Ashmore Sicav Emerging Markets Total Return Fund and the Templeton Emerging Markets Bond Fund.
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