Total Return Approach
Investments are not constrained by a benchmark; only investing in countries and securities that are attractive.
Strategy Overview
The strategy seeks a total return by investing in investment grade debt obligations of sovereign, quasi-sovereign and corporate issuers located in emerging market countries.
Broad Opportunity Set
Investment universe includes sovereign, quasi-sovereign and corporate issuers. The strategy invests in debt that is denominated in hard currencies as well as local currencies.
Experienced Team
Investing in asset class since 1996.
Key Features
Resilience Through Different Market Cycles
- Strong risk-adjusted returns in risk-on & risk-off markets
- History of positive relative performance during rising interest rate periods
Established, Proven Investment Process
- Best expression of investment ideas included in portfolio
- Fully utilises extensive resources of Franklin Templeton Fixed Income
Benchmark Unconstrained
- Multiple levels of diversification
- Higher yields than comparable benchmarks
- Low excess return correlation vs. peers
- Customizable to meet specific client objectives
Our Philosophy
The investment team believes that inefficiencies in emerging market debt markets result from investor segmentation, illiquidity, and the complexity of many emerging market debt securities. The strategy seeks to exploit these inefficiencies through an unconstrained investment approach with diversification across countries, sectors, currencies, and issuers.
Our Investment Process
A well-established, three step investment process
Our investment process is dynamic and is subject to change without notice due to various factors, including but not limited to market and economic conditions.
Country Allocation
Country selection is the most important decision in structuring our emerging market debt portfolios. The first step in this process is fundamental country research. We believe thorough analysis and a large investable universe offer investment opportunities.
Currency Allocation
Following country selection, the investment process focuses on whether to take exposure in the form of hard currency or local currency instruments. Not all emerging market countries issue hard currency debt, so the inclusion of local currency instruments results in a significantly expanded investment universe.
Issuer Selection
The last stage of the investment process involves relative-value analysis to select the most attractive securities within a particular country denominated in the chosen currency. The primary decisions at this stage are selecting sovereign, quasi-sovereign, or corporate issuers, and choosing the appropriate maturity and coupon structure.
Meet the Team
Investment Team
Day-to-day decision making on the strategy is led by Nicholas Hardingham, Stephanie Ouwendijk and Robert Nelson, highly experienced portfolio managers. The team draws primarily on the resources of the research team and other parts of Franklin Templeton’s fixed income group, as well as the emerging markets equity platform based around the world.
Nicholas Hardingham, CFA
Portfolio Manager
Industry since 1999
Stephanie Ouwendijk, CFA
Portfolio Manager
Industry since 2007
Robert Nelson, CFA
Portfolio Manager
Industry since 2000
