Winners rationale

Emerging market (EM) debt investors enjoyed another solid year in 2017 despite concerns over global liquidity tightening. Besides hard currency debt, EM local currency bonds also rebounded strongly from oversold levels seen in early 2016, driven by both, stronger currencies against the US and falling rates. EM local currency bonds achieved around 15% in returns last year, compared with hard currency’s 10%.

Apart from the substantially higher yields that EM debt delivers compared to developed markets (DM), the economic fundamental picture in EM has been generally improving. The growth in foreign exchange reserves across the asset class throughout the past two years has been a key to this. Additionally, strong and synchronised global growth was another boon to the asset class. From the perspective of private banking client appetite, the industry saw a clear transition from DM bonds to the EM space, mainly due to spread differences.

Since its founding in 1992, Ashmore Investment Management has focused exclusively on EMs, and the firm’s investment team dedicated to the segment has grown to 80 professionals. The firm’s unchanged and time tested macro top-down investment approach, complemented by a robust bottom-up process enables it to achieve consistent performance through various market cycles.

Over the past 18 months, Ashmore Investment Management has seen significant inflows into its EM bond strategies. In particular, its EM short duration fund which aims to provide investors with a relatively stable return appeals to a variety of investors. Moreover, the firm saw marked success from an exclusive collaboration with a major private bank in the region, raising over US$400 million for a fixed maturity EM bond strategy.

Fund selectors have chosen Ashmore Investment Management as this year’s Best Fund Provider – Emerging Market Bond.