Emerging Markets

Invesco Emerging Markets Local Bond

A total return strategy that invests primarily in locally denominated, emerging market sovereign debt securities

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Downside protection

Employs asymmetric risk budgeting and management to reduce volatility.

Integrated team and process

Analyzes global markets while incorporating the links between developed and emerging market economies.

Defined Investment Time Horizon

Seeks to deliver on the investment objective over multiple time periods and different market cycles.

Why this strategy

Locally denominated, emerging market debt securities offer attractive yields and income, but expose investors to a variety of risks, including foreign exchange, credit quality, interest rates, macroeconomic conditions, and regional politics. Our strategy seeks to reduce volatility throughout the emerging market cycle and offer downside protection by maintaining a tracking error below that of the benchmark and adjusting the tracking error during risk-on and risk-off conditions.

How we do it

Top-down global macro analysis determines the overall portfolio risk budget and the allocation of that risk budget to two levers: foreign currency and interest rates. Bottom-up country analysis identifies favorable country-specific opportunities. Country views are then expressed directionally via one or both of the two levers, influenced by the attractiveness of their risk-reward profiles.