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Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
Investec asset management
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Investec asset management

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  • 1. Emerging Market Debt – risk asset orsafe haven?Thanos PapasavvasStrategist, Fixed Income & CurrenciesJune 2012
  • 2. Fixed income is a core capability of Investec ● Over 25 years successful experience in our chosen markets ● £19.6 bn* under management – over 34% of Investec Asset Management’s total ● Specialist teams ensure expert decision-making ● Best investment ideas matched to mandate Best Large Bond Group Award 3 Years objectives Second year runningSource: Investec Asset Management, 30 April 2012*On a net sourced basisPage 2 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 3. Investec’s emerging markets debt pedigree● Investec Asset Management’s origins are South African● Total assets in emerging markets approximately £34 billion*● Over 75 investment professionals across our equity and fixed income teams, covering over 60 emerging countries over the world● Over £6 billion invested in global emerging markets debt, plus further £9 billion in South African and African fixed incomeAs at 30 April 2012*This covers assets held by all strategies in EM assetsPage 3 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 4. The attractions of emerging markets debt● Strong emerging market fundamentals – Emerging markets as percentage of world better placed than many developed Contribution to world GDP 36% markets Contribution of emerging markets to aggregate 92% growth over the 3 year period Jun 2008 to Jun 2011● Significant and growing part of global Contribution to global trade 37% economy, with plenty of room for Government bonds outstanding (includes both 14% productivity gains domestic and international)● Growth accentuated by four accelerator Population 84% themes Total land surface area 74% − Favourable demographics Known oil reserves 86% − Commodity richness − History of fiscal and monetary reforms − Better fiscal situation Convergence to developed markets will lead to outperformance of EM assetsSource: IMF World Economic Outlook Database June 2011,BIS (Bank for International Settlements) June 2011,CIA World Fact book and EIA (US Energy Information Administration)Page 4 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 5. A self-reinforcing cycle Nominal GDP (USD$) 50 Nominal GDP (US$ trn) Emerging Markets 40 Developed Markets Resource Increasing 30 demand wealth 20 10 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Share of Nominal GDP Growth Share of Global GDP Growth 90% Emerging Markets Demand for Demand for 80% Developed Markets consumer consumer 70% services goods 60% 50% 40% 30% 20% 10% 0% 2006-2010 2011-2015 2016-2020Source: Business Monitor International September 2011Page 5 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 6. EM accelerator theme 1Favourable demographicsPopulation growth Working age % of population Dependency ratios are improving in emerging marketsSource: UNStats, World Bank, IAM calculationsPage 6 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 7. EM accelerator theme 2Commodity richesPercentage share of global commodity production 100% Developed Emerging 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Coal Iron Ore Gold Oil Copper Rice Wheat Global natural resources are predominantly found in EMSource: UN Stats, IAM calculationsPage 7 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 8. EM accelerator theme 3Strong historic reformsAdoption of fiscal rules in EM Adoption of Inflation Targeting in EM Much of EM applying global best practices in managing macro economic stabilitySource: IMF, Centre for Economic Policy ResearchPage 8 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 9. EM accelerator theme 4Much better fiscal situation● Emerging markets do not face the challenges that the developed world is facing● Rising public debt in industrial countries poses fiscal challengesOverall Balance Gross Debt % of GDP % of GDP Fiscal situation much stronger compared with developed marketsSource: IMF, June 2011Page 9 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 10. Accessing the Emerging Markets ThemesKey drivers and relationshipsPage 10 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 11. Local Currency Emerging Markets Debt● Exposure to sovereign bonds denominated in the Country weights of the JP Morgan local currency index Other currency of the issuer Thailand 2.9% Brazil 10.0% 8.3%● Available in emerging markets with more developed Mexico Malaysia 10.0% 10.0% financial systems Colombia● Performance driven by two sources of return: 4.4% Indonesia 10.0% Poland − Bond yields and yield compression 10.0% Turkey 10.0% − EM FX appreciation Russia 8.8% South Af rica Hungary 10.0% 5.6%● A relatively new market, with rapidly increasing depth Local currency emerging markets debt and liquidity 23.0% 22.0% 25% Total return● For investors that: 18.1% 16.9% 16.8% Bond return 15.7% 15.3% 15.2% 20% 13.1% FX Return (incl carry) 11.4% 15% − Look for highest EMD return, but accept higher 8.6% 8.0% 7.7% 7.3% 7.2% 7.1% 6.3% 10% 5.5% 5.4% 5.2% 5.0% 4.5% volatility 5% 0% − Look for true diversification from their base -1.0-% -1.8-% -5% -5.2-% currency and credit holdings -6.2-% -10% -10.6-% -15% -20% 2003 2004 2005 2006 2007 2008 2009 2010 2011Sources: JP Morgan GBI-EM Global Diversified in USD, January 2003 to February 2012Page 11 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 12. Hard Currency Emerging Markets Debt● Exposure to sovereign bonds denominated in hard currencies (USD, EUR, etc)● Returns driven by country credit fundamentals: − Government debt ratios − Ability and willingness to repay − Improving credit ratings● An established market with a long history● For investors that: JP Morgan EMBI GD credit buckets − Look to benefit from structural reforms and credit (% of total benchmark market capitalisation) quality improvement in EM governments − Want to invest in a wide range of EM countries, providing diversification and excess to frontier markets − Look to avoid currency risk, often the more volatile area of EMSource: JP Morgan February 2012Page 12 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 13. Emerging Markets Currencies● Pure play on emerging market currencies EM currencies – breakdown of the JP Morgan ELMI+ Index Mexico 10.4%● Invests via short-dated instruments limiting interest Poland 10.3% Singapore 9.8% rate risks Hong Kong Turkey 9.5% 9.5% Czech Republic● Emerging market currencies should outperform 7.6% Hungary 5.9% South Africa 4.9% developed market currencies over time: Romania Israel 3.0% 3.0% Colombia − Higher rates of growth 2.4% Brazil 2.1% India 2.1% − Improving governance Russia 2.1% Chile 2.1% Malaysia 2.0% − Natural resource abundance Thailand Philippines 2.0% 2.0% Taiwan 1.9% − Lower debt levels Argentina Indonesia 1.9% 1.9% China 1.9%● A broad, heterogeneous emerging markets universe Peru 1.8% 0% 2% 4% 6% 8% 10% 12% provides much opportunity for relative value plays Emerging markets currencies offer value● For investors that: 5.0 4.8 − Look for currency appreciation from a diverse 4.6 BRL ILS 4.4 basket of EM currencies COP HKD SGD 4.2 IDR − Look for avoid interest rate risk, for instance due to 4.0 THB ARS TWD 3.8 PHP inflation risks 3.6 Actual INR 3.4 Fair Value 3.2 3.5 3.7 3.9 4.1 4.3 4.5 4.7 4.9 5.1Sources: Investec, PENN, JP Morgan February 2012Page 13 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 14. Emerging Markets Corporate debt● Expanding universe of sound companies constrained JPMorgan CEMBI BD Rating and Sector breakdown by sovereign rating Consumer● Higher yield than developed market corporate debt Metals & Mining Products 5% B Residual 5% 7% 10% across rating bands Banks Utilities● Fast-growing asset class and investor base will mean 10% 33% BB positive flows 15% Telecom● Dedicated EM corporate debt funds still rare, first 12% move advantage Investment Grade● For investors that: Oil 14% Industrials 70% 19% − Look to benefit from growth and credit quality improvement in EM corporates Index yields February 2012 9% 8.50% − Look to add diversification and better yield to their 8% 7.31% 7% existing credit portfolio 6% 4.90% 5.57% 5% 4% 3.47% − Look to add a diverse source of return to their 3% 2% 1.05% EMD portfolio 1% 0% US Govt US IG Corp EMIG Corp EM Sov US HY Corp EM HY CorpSource: EM High Yield Corporate = JP Morgan CEMBI Broad Diversified High Yield Index, EM Investment Grade Corp = JP MorganCEMBI Broad Diversified Investment Grade Index, US High Yield Corporate = Merrill Lynch US High Yield Master II Index, USInvestment Grade Corp .= Merrill Lynch US Corporate Master Index, EM Sovereign Bonds= JPMorgan Emerging Markets Bonds GlobalDiversified Index , US Treasuries = Merrill Lynch US Treasury MasterPage 14 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 15. Emerging Markets Blended Debt● Mix of Local Debt, Hard Currency Debt and EM Risk vs. Reward Corporate Debt, eg: 15% − 50% Local 14% 13% − 40% Hard Ann. return % 12% Local EMD − 10% Corporate 11% Hard EMD● Active asset allocation offers significant return 10% Corp EMD 9% Blended EMD opportunities 8%● Provides much opportunity for relative value plays 7%● For investors that: 8% 9% 10% 11% 12% 13% 14% 15% Ann. risk % − Look for the widest range of EMD, offering best risk-reward characteristics Ann Standard Return deviation − Look for capital gains driven by currency Blended EMD 11.5% 9.9% appreciation, credit improvement and structurally Dollar EMD 10.5% 9.1% lower inflation Local EMD 12.4% 12.0% Corporate EMD 8.2% 9.0%Total returns in USD for period 31 December 2002 to 31 January 2012, Local Currency EMD = JPM GBI-EM Global Diversified;Hard Currency EMD = JPM EMBI Global Diversified; Blended EMD = 50% Local, 40% Hard, 10% Corporate* Annualised standard deviationPage 15 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 16. Emerging Markets local currency versus hard currency 25 US Treasury yield Brazil USD yield Brazil local yield 20 15 10 Compensation for: Inflation and currency exposure 5 Compensation for: Credit quality Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Opportunities available from over 40 local bond and currency marketsSource: US treasury yield: J.P.Morgan GBI US Index YTM; Brazil USD yield: J.P.Morgan EMBI Brazil Index YTM; Brazil local yield: GBI-EM Broad Brazil IndexYTM. Updated to 24 February 2012Page 16 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 17. Investec EM Debt and Currency Strategies Includes off-benchmark Frontier Markets Excludes off-benchmark 10% EM Currency Alpha Frontier Markets Alpha target Blended EMD Dynamic Local EMD Broad Local EMD 2-4% Investment Grade EMD EM Corporate Debt EM Currency Hard Currency EMD EM Currencies only Local EM Debt Hard Currency EM Debt and CurrenciesPage 17 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 18. Investecs key competitive advantages in EMD● A broad range of EMD strategies● A long history in Emerging Markets − More than 15 years experience in local and external bond markets and more than 10 years in emerging currencies − Local presence and experience across emerging asset classes gives us excellent insight in what drives emerging market returns● Tried and tested emerging market bond and currency processes − Built on proven local bond and global currency processes and long history in EM corporate investing● Systematic and disciplined approach identifies wide range of opportunities − Proprietary quantitative models provide objective input − Not overly reliant on one theme● Specialist and highly motivated team − Diverse and complementary skill set − Experienced professionals focused on emerging bond and currency marketsPage 18 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 19. Assets under management● Increased assets significantly across different strategies Assets under management Assets under Management 30 April 2012 Emerging Markets Local Currency Debt (Broad) £4,330m Emerging Markets Local Currency Debt (Dynamic) £1,482m Blended EMD (50% local / 50% hard) £169m Hard Currency Debt £110m EM Corporate Debt £47m Emerging Market Currency £113m Cross-over and other EMD £290m Total £6,544 m A well-supported capabilityPage 19 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 20. Emerging Markets Debt & Currency Emerging Market Debt & Currency Strategy Leaders Peter Eerdmans – Werner Gey van Pittius – Asia MEA & CIS Investment Specialists – Sovereign & FX Vivienne Taberer – Latam Michail Diamantopoulos – CEE Mark Evans – Asia Antoon de Klerk – Africa Duncan Ngandu – Latam & CEE Grant Webster – MEA & CIS Investment Specialists – Credit Victoria Harling – Frontier and Quasi Leah Parento – EM Credit Sovereign Tammy Lloyd – EM Credit Sergey Bolshakov – EM Credit Thanos Papasavvas Fixed Income & Currency Strategist 5 Fixed Income & Currency DealersPage 20 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 21. Disciplined and repeatable process driven by bottom-up views BOTTOM UP TOP DOWN FINAL PORTFOLIO Fundamentals, valuation and Beta market behaviour discussion Structured approach Disciplined approach based on Vigorous debate unlocks captures “Compelling Forces”, covering wide insight across Investec’s experience and range of factors investment teams controls risk Portfolio built bottom-up, supplemented with top-down checks and balancesPage 21 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 22. Latest Dynamic portfolio – active positions Active duration positions Active currency positions Total: -0.08 Total: 3.68% Russia 0.17 CNY 4.95% South Africa 0.17 KRW 3.99% Brazil 0.16 INR 3.92% Hard currency 0.12 IDR 2.48% Nigeria 0.10 RUB 2.47% Czech 0.09 ZAR 1.96% Chile 0.07 CLP 1.88%Investment Grade Corporate 0.06 BRL 0.02% High Yield Corporate 0.05 TRY 0.00% Turkey 0.01 MYR -0.02% Philippines 0.00 PLN -0.03% Romania 0.00 CZK -0.05% Peru 0.00 HUF -0.11% Poland -0.01 MXN -0.15% Hungary -0.02 COP -2.04% Thailand -0.08 THB -2.37% Indonesia -0.09 PEN -2.38% Colombia -0.13 ILS -2.42% Mexico -0.16 PHP -3.93% Malaysia -0.17 TWD -4.49% -0.50 -0.40 -0.30 -0.20 -0.10 0.00 0.10 0.20 0.30 -6.00% -4.00% -2.00% 0.00% 2.00% 4.00% 6.00% Source: Investec Asset Management, 30 April 2012 Off-composite index positions Page 22 | Emerging Market Debt – risk asset or safe haven? | June 2012 09175
  • 23. Emerging Markets Local Currency DebtPerformance to end of April 2012 (in GBP)Emerging Markets Local Currency Debt Performance vs. Local EMD and US$ EMDcomposite performance 18% Investec EM Local Currency Composite Performance Index AlphaEM Local Currency IR GBI-EM Global Div % % % 16%One year 3.13 3.77 -0.64 -0.34 14% EMBI Glbl Div 12%Three years, annualised 14.66 12.68 1.98 0.78 10%From 31 July 2006, annualised 16.39 14.73 1.66 0.53 8%See source 1. 6% 4%EM Local Currency Lipper ranking 2% Rank** Rank** Rank** 0% 1 year 3 years since inception Lipper Universe 1 year 3 years (ann) Since inception All onshore and offshore (ann)* 130/196 68/132 2/101 Global EMD fundsSee source 2. See source 1. Strong performance relative to benchmark and peer groupSource: 1. Inception date 31 July 2006. Comprises the Investec Emerging Markets Local Currency Debt Fund and Investec GSF Emerging Markets Local Currency Debt Fund; Gross performance, annualised, with gross dividends reinvested. 2. Lipper, net of fees. ** Ranking of Investec Emerging Markets Local Currency Debt Fund A Acc Gross GBP The performance quoted is of actual performance post share class launch date of the A GBP share class (01 June 2007) and synthesised performance pre A GBP share class launch date. The synthesised performance is based on oldest share class since fund launch and takes into account the difference in total fees between the oldest and the synthesised share classesPage 23 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 24. Emerging Markets Local Currency DebtPerformance attributionMajor alpha sources(relative % contribution since inception) Top 5 contributors Contribution (ann) Brazil 0.32% 2.0% Currency Local Debt Other Russia 0.30% 1.5% Israel 0.28% Colombia 0.27% 1.0% Chile 0.26% 0.5% 0% Bottom 5 contributors Contribution (ann) Czech -0.07% -0.5% Slovakia -0.02% -1.0% Indonesia -0.02% FX Beta Currency Duration Country Curve & Dollar Credit Admin Total selection Beta selection issue sov debt Namibia 0.01% selection Argentina 0.01% Positive contributions from the key bottom-up alpha sourcesSource: Investec Asset ManagementAttribution based on actual positions and end-of-day prices. From 31 July 2006 – 30 April 2012Page 24 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 25. Multi-strategy Fixed Income
  • 26. There are many ways to make money in fixed incomeAnnual Returns in USD for different fixed income asset types – best to worst 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 13.5% I8.9% 22.0% 27.9% 23.0% 6.3% 15.2% 18.1% 13.9% 60.9% 15.7% 9.6% Highest ● Returns vary return significantly across the 9.2% 6.7% 11.6% 18.5% 12.1% 3.7% 10.8% 11.5% 10.1% 22.0% 15.3% 5.2% range of fixed income 6.6% 4.2% 11.4% 16.9% 11.3% 3.4% 6.9% 9.0% 2.9% 16.3% 7.4% 5.0% opportunities 2.0% 3.5% I8.4% 6.3% 5.5% 3.4% 5.2% 5.4% -4.8% 4.4% 5.8% 3.2% ● We look to hold assets -2.6% 3.2% 1.8% 2.3% 3.5% 2.8% 3.8% 3.4% -5.2% 0.3% 5.2% 0.2% that suit the economic Lowest -5.3% -3.5% -1.0% 1.2% 1.5% -9.2% 3.1% 2.1% -26.6% -3.7% 0.3% -1.8% return environment and that offer value Emerging market debt Investment grade corporate bond ● We avoid those Treasuries Cash that don’t Global High yield corporate bonds Multi-strategy funds can adapt exposure to suit different environmentsSource: Investec Asset Management, Bloomberg BBA 1 month Libor, Citigroup Treasury Index, Citigroup WGBI-ex US, JPMorgan ELMI+ in USD to 2003, JP Morgan GBI-EM Global Diversified in USD from 2003, Merrill Lynch Global HY Index hedgedinto USD, Merrill Lynch Global Corporate Index hedged into USDPage 26 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 27. Strategic Bond, Global Bond and Global Strategic Income- How they differStrategic Bond Global Bond Global Strategic Income● Benchmark unconstrained ● Benchmark aware* ● Benchmark unconstrained● High Yield allowed up to 30% ● No High Yield ● High Yield allowed● Up to 100% IG and 25% EM Debt ● Limits of 50% Credit & 25% EM Debt** ● No fixed limits, but well diversified● Income seeking, but through ● Focus on high quality global ● Income seeking, but total return investment in high quality bonds government and corporate bonds orientated A multi-strategy solution without A more conservative way to exploit A more aggressive way to exploit many sleepless nights global bond & currency markets global bond & currency markets Two sides of the same coin* Barclays Global Aggregate for performance comparisons** Please note these are internal limits and are subject to changePage 27 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 28. Disciplined and repeatable process STEP Asset Allocation Decision 1 Allocation to Global government bonds, Corporate bonds, Emerging market bonds, Developed and emerging market currencies STEP Specialist Asset Decision Making Underlying specialist teams manage the allocated exposure 2 STEP Risk Management Risk budget scales positions to reflect the mandate 3 Risk analysis ensures appropriate overall risk exposure STEP Final Portfolio Bringing together our best global fixed income house views 4 A sustainable and repeatable processPage 28 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 29. Risk budgets scale positions for each mandate● Exploits Investec’s skill set as fully as possible within mandate constraints● Exposure ranges provide framework for scaling portfolio positions to suit each mandateNormal exposure limits* Sources of return Strategic Bond Global Bond Strategy Global Strategic Income Strategy Interest rates +2 to +10 years duration Bmk +/- 4 years duration -2 to +8 years duration Currency GBP 100%, +/- 20% Bmk +/- 50% USD 10-80% Credit Up to 100% IG, Up to 30% HY Up to 50% IG Up to 65% IG, Up to 65% HY Emerging markets Up to 25% Up to 25% Up to 65% Target tracking error 2% to 4% 2% to 4% 6% to 10% volatilitySource: Investec Asset Management*Please note these are internal limits and are subject to changePage 29 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 30. Investec’s Global Bond FundAllocation, Duration and Currency exposureAllocation Duration exposure (years) Currency exposureThe portfolio may change significantly over a short period of time.Source: Investec Asset Management as at 20 April 2012Page 30 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 31. Investec’s Global Strategic IncomeAllocation, Duration and Currency exposureAllocation Duration exposure (years) Currency exposureThe portfolio may change significantly over a short period of time.Source: Investec Asset Management as at 20 April 2012Page 31 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 32. Investec’s multi-strategy Fixed Income fundsAllocation exposure Strategic Bond Global Bond Global Strategic IncomeThe portfolio may change significantly over a short period of timeSource: Investec Asset Management as at 20 April 2012Page 32 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 33. Attractive risk-adjusted returns versus competitors10 Year Annualised Return & Risk versus Peer group 13.0 Investec GSF Global Strategic Income A Acc Investec GSF Global Bond A Acc 11.0Annualised perf ormance % change 9.0 7.0 5.0 Past performance figures are not audited 3.0 and should not be taken as a guide to the future. Source: Lipper, dates to 30 April 2012, NAV based, (inclusive of all annual management fees but excluding any initial 1.0 charges), in USD. Chart axes converge on 3.0 5.0 7.0 9.0 11.0 13.0 15.0 17.0 19.0 21.0 Lipper Global Bond Global sector average. Annualised standard deviationPage 33 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 34. Why Investec Asset Management?● Specialist approach ensures expert decision making● Clear investment philosophy drives investment thinking● Best ideas blended to create well diversified high conviction portfolios● Range of fixed income strategies● Over 25 years successful experience in our chosen markets Committed to a successful, long-term partnership with our clientsPage 34 | Emerging Market Debt – risk asset or safe haven? | June 201209175
  • 35. Important informationThis document is not for general public distribution. If you are a private investor and receive it as part of a general circulation, pleasecontact us at +44 (0)20 7597 1900.The information discusses general market activity or industry trends and should not be construed as investment advice. The economicand market forecasts presented herein reflect our judgment as at the date shown and are subject to change without notice. Theseforecasts will be affected by changes in interest rates, general market conditions and other political, social and economic developments.There can be no assurance that these forecasts will be achieved. Investors are not certain to make profits; losses may be made.The information contained in this document is believed to be reliable but may be inaccurate or incomplete. Any opinions stated arehonestly held but are not guaranteed and should not be relied upon.This communication is provided for general information only. It is not an invitation to make an investment nor does it constitute an offerfor sale and is not a buy, sell or hold recommendation for any particular investment.In the U.S., this communication should only be read by institutional investors, professional financial advisers and, at their exclusivediscretion, their eligible clients, but must not be distributed to U.S. persons.In Australia, this document is provided for general information only to wholesale clients (as defined in the Corporations Act 2001). It is notan invitation to make an investment nor does it constitute an offer for sale.Outside the U.S., telephone calls may be recorded for training and quality assurance purposes. Issued by Investec Asset ManagementLtd (IAM), June 2012. IAM is authorised and regulated by the Financial Services AuthorityPage 35 | Emerging Market Debt – risk asset or safe haven? | June 201209175

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