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For professional investors and financial advisers - not for use by retail investors Navigating 5 years of emerging market corporate debt Aberdeen Global – Emerging Markets Corporate Bond Fund November 2016 A mainstream asset class Here we discuss some of the reasons why emerging markets (EM) corporates have become an important diversifier for your fixed income portfolio. 1 Relative size of markets (US$bn) EM corporates are a diverse asset class Among major fixed income asset classes, EM corporates have been expanding at a rapid pace since 2009 when compared to other fixed income markets. With size comes diversification, both geographically and sectorally. 2000 1500 1000 500 0 EM US US EM hard Corporates High Yield Leveraged currency Loans Sovereigns ABS CMBS Euro High Yield Source: JP Morgan, 31 October 2016. For illustrative purposes only. 2 EM Corporate Leverage & Liquidity Strong credit fundamentals Average credit metrics in EM corporates are stronger than their US high yield counterparts. 8 7 6 5 4 3 2 1 0 Dec 07 Dec 08 Dec 09 Dec 10 Dec 11 Dec 12 Dec 13 Dec 14 Dec 15 Global EM HY Net Leverage (x) US HY Net Leverage (x) Source: BofA Merrill Lynch Global Research, December 2015. 3 Default rates % 14 Low default rates Despite the perception of higher risk in EM, default rates in the EM corporate universe are lower than developed markets. 12 10 8 6 4 US high yield EM avg 2 Navigating 5 years in emerging market corporate debt 2013 2014 2011 2012 2010 2009 2008 2007 2006 2005 2004 2002 2003 2001 2000 EM Source: JP Morgan, August 2016. For illustrative purposes only. 2015 2016 YTD 2016F 2 0 US high yield avg 4 10 year annualised volatility Performance Over the past 10 years the JP Morgan Corporate Emerging Market Bond Index has delivered a cumulative return of 108.25% and an annualised return of 6.40%. This compares favourably to other global bond indices. % 16 14 12 10 8 6 4 2 0 GBI-EM CEMBI Global Div Broad (in USD) Div JULI EMU IG Maggie US NEXGEM Euro HY Treasury Source: JP Morgan, November 2016. For illustrative purposes only. Indices used: Euro Credit = Maggie, US Treasury = GBI US, US IG Corporates = JULI, Eurozone IG = EMU IG, EM Corporates = CEMBI BD, EM LC Sovereign = GBI-EM GD, EM Frontier = NEXGEM. Past performance is not a guide to future results. Cumulative performance % 160 150 140 6.54% annualised returns since launchA 130 120 110 100 Sep 11 TM 1st quartile for 1, 3 and 5 year performance amongst emerging market corporate bond fundsB,c Mar Sep 12 12 Fund Mar Sep Mar 13 13 14 Benchmark Sep 14 Mar 15 Sep 15 Mar 16 Sep 16 The Fund = Aberdeen Global – Emerging Markets Corporate Bond Fund. The Benchmark = JPM Corporate Emerging Markets Bond Index, Broad Diversified Index. Source: Aberdeen Asset Managers, BPSS, Datastream, USD, September 2016. Performance is shown gross of fees and does not reflect investment management fees. Had such fees been deducted, returns would have been lower. The benchmark is included for comparison purposes only as the fund is not managed to a specific benchmark. Past performance is not a guide to future results. Annual returns (%) - year ended 30/10 Fund 2016 2015 2014 2013 2012 10.29 (2.58) 6.15 (0.08) 13.87 Performance Data: Share Class A2 Acc. Source: Lipper. Basis: Total return, NAV to NAV, net of annual charges, gross income reinvested. This fund is not managed against a specific benchmark. Past performance is not a guide to future results. Based on gross returns since inception (December 2010), source: Lipper, August 2016. Figure is to end of August 2016 for share class ZI Inc, USD. Source: Lipper, August 2016. Basis: Total Return, NAV to NAV, net of annual charges, gross income reinvested, USD. C © 2016 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. A B Navigating 5 years in emerging market corporate debt 3 Navigating the market The Aberdeen Global – Emerging Markets Corporate Bond Fund is celebrating 5 years of strong performance. We rely on two key factors: People The emerging market (EM) corporate debt universe has diversified exponentially in geography and sector over the past 5 years. To keep up with the expanding size of the asset class we have: London Budapest Hong Kong • 15 dedicated EM corporate debt professionals in London, Singapore, Kuala Lumpur and Thailand; and Singapore Jakarta • More than 80 dedicated emerging market professionals around the world. Bangkok Kuala Lumpur São Paulo Sydney Process Credit selection is key. Our fundamental analysis uncovers companies that can weather political and macroeconomic headwinds through the cycle. We research around 1,000 companies in over 70 countries including: • Global leaders in their respective fields $91.2 bn $34.8 bn $27.9 bn $4.9 bn Hutchison Whampoa, a Fortune 500 telecom and ports operator CNOOC Ltd, China’s largest producer of offshore oil and gasD Grupo Globo, the largest media company in Latin AmericaE $1.2 bn $1.1 bn $605 mm $596 mm GT Bank, one of the largest banks in Nigeria MHP, the market leader in the Ukrainian poultry market Cementos Progreso, owns 83% of the cement market in GuatemalaF Banglalink, the second largest telecom company in BangladeshG Gazprom, the world’s largest gas reserveC • National champions Figures are revenues for financial year 2015 in US dollars. Source: Gazprom webiste, April 2016. Source: CNOOC Ltd website, April 2016. E Source: Grupo Globo website, January 2016. F Source: FitchRatings, September 2015. G Source: EMC, April 2016. C D 4 Navigating 5 years in emerging market corporate debt Research trips We undertake on-the-ground proprietary research to assess the underlying creditworthiness of the companies in which we invest. We always meet the management of the companies we invest in and keep in regular contact, which helps us build good long term relationships and gives us access to the company even in times of stress. Meeting management and making site visits also gives us a better idea of the drivers of the business and helps us understand their corporate culture. Some of the research trips we have done recently include the below destinations. Turkey – Istanbul Russia – Moscow Brazil – Rio de Janeiro India – Delhi Nigeria – Lagos Peru – Lima Chile – Santiago Bangladesh – Dhaka Indonesia – Jakarta Thailand – Bangkok Hungary – Budapest Malaysia – Kuala Lumpur China – Shanghai China – Shenzhen Azerbaijan - Baku Argentina – Buenos Aires Navigating 5 years in emerging market corporate debt 5 Important information For professional investors and financial advisers - not for use by retail investors Please consider the risks • The value of shares and the income from them can go down as well as up and your clients may get back less than the amount invested. • Investing globally can bring additional returns and diversify risk. However, currency exchange rate fluctuations may have a positive or negative impact on the value of your investment. • Bonds are affected by changes in interest rates, inflation and any decline in creditworthiness of the bond issuer. Bonds that produce a higher level of income usually also carry greater risk as such bond issuers may not be able to pay the bond income as promised or could fail to repay the capital amount used to purchase the bond. • Emerging markets or less developed countries may face more political, economic or structural challenges than developed countries. This may mean your money is at greater risk. • This Fund can use derivatives in order to meet its investment objectives. This may result in gains or losses that are greater than the original amount invested. • A full list of risks applicable to this Fund can be found in the Prospectus, which is available on request or at our website aberdeen-asset.com. Contact us For more information please visit aberdeen-asset.com Other important information Aberdeen Global is a Luxembourg-domiciled UCITS fund, incorporated as a Société Anonyme and organized as a Société d’Invetissement á Capital Variable (a “SICAV”). The information contained in this marketing document is intended to be of general interest only and should not be considered as an offer, or solicitation, to deal in the shares of any securities or financial instruments. Aberdeen Global has been authorized for public sale in certain jurisdictions and private placement exemptions may be available in others. It is not intended for distribution or use by any person or entity that is a citizen or resident of or located in any jurisdiction where such distribution, publication or use would be prohibited. Aberdeen Global is not registered under the United States Securities Act of 1933, nor the United States Investment Company Act of 1940 and therefore may not directly or indirectly be offered or sold in the United States of America or any of its states, territories, possessions, or other areas subject to its jurisdiction or to or for the benefit of a United States Person. For the definition of United States Person, see the current Aberdeen Global prospectus. No information, opinions or data in this document constitute investment, legal, tax or other advice and are not to be relied upon in making an investment or other decision. Subscriptions for shares in the Fund may only be made on the basis of the latest Prospectus and relevant Key Investor Information Document (KIID). These can be obtained free of charge from Aberdeen Asset Managers Limited, 10 Queen’s Terrace, Aberdeen, AB10 1YG, Scotland and are also available on aberdeen-asset.com. Issued by Aberdeen Asset Managers Limited. Registered in Scotland No.108419. Registered Office: 10 Queen’s Terrace, Aberdeen, AB10 1YG. Authorised and regulated by the Financial Conduct Authority in the United Kingdom. Aberdeen Asset Managers Limited reserves the right to make changes and corrections to any information in this document at any time, without notice. 25750-151216-3 121026517 12/16