For investors looking for a broad exposure the Emerging Markets Debt universe, Blended Debt offers a combination of USD-denominated External Debt and Corporate Debt along with Local Currency Debt and FX. Ashmore actively manages the allocation to the various themes, incorporating the best investment ideas from each of the individual themes to target a superior total return while reducing overall portfolio risk.
Ashmore has managed Emerging Markets Blended Debt strategies since 2003, when the entire Emerging Markets debt universe was roughly USD 3 trillion in size. In the intervening period, the market has expanded more than ten-fold to approximately USD 30 trillion in size and now comprises more than 150 distinct markets in the sovereign and corporate sectors. Frequently, investors are unsure which of these markets to invest in and when to make allocation changes, and look to an asset manager such as Ashmore to shift allocations between the various sectors to reflect changing market dynamics. Blended Debt is suited for those who want to invest in Emerging Markets because they see fundamental value, but who would like to delegate the asset allocation to a dedicated specialist.
Blended Debt strategies generally adopt a customised benchmark that “blends” a USD sovereign index – generally the JP Morgan EMBI Global Diversified Index – with a local currency sovereign index – generally the JP Morgan GBI-EM Global Diversified Index and/or the JP Morgan ELMI+ Index (a currency index). The JP Morgan CEMBI Broad Diversified, which tracks USD-denominated corporate debt, was launched in 2007 and may also be included as part of a customised benchmark.
Ashmore currently offers this theme on both a segregated account and commingled fund basis. Investors in segregated accounts can determine the construction and weighting of the customised benchmark.