- Strong risk-adjusted returns in risk-on & risk-off markets
- History of positive relative performance during rising interest rate periods
Strategy Overview
The strategy seeks income yield and long term capital appreciation by investing mainly in debt obligations of sovereign, quasi-sovereign and corporate issuers located in emerging market countries.
- Total Return Approach – Investments are not constrained by benchmark; the strategy only invests in countries and securities that are attractive
- Broad Investment Universe – Investment universe includes hard currencies, sovereign, quasi-sovereign and corporate issuers
- Experienced Team – Investing in the asset class since 1996
Resilience Through Different Market Cycles
Established, Proven Investment Process
- Best expression of investment ideas included in portfolio
- Fully utilizes 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 and issuers.
Our Investment Process
Country Allocation
Country allocation 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.
Issuer Selection—Sector and Currency
Having established our country allocation, we select the most attractive securities within a particular country. The primary decisions at this stage are selecting sovereign, quasi-sovereign, or corporate issues, choosing the appropriate maturity and coupon structure, and optimizing currency exposure.
Portfolio Construction
The team takes a long-term view of the markets and applies a total return approach to constructing portfolios. The strategy seeks to control risk in the portfolio construction process by focusing on minimizing issuer default risk, and through diversification.
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.
Meet the Team
Day-to-day decision making on the strategy is led by Nicholas Hardingham and Stephanie Ouwendijk, 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.
Nicholas Hardingham, CFA
Portfolio Manager
Industry since 1999
Stephanie Ouwendijk, CFA
Portfolio Manager
Industry since 2007
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WHAT OUR MANAGERS THINK
