JPMB - Cynical Bull - An Emerging Markets Debt Perspective

2024-03-22 13:15:00 ET

Summary

• The VanEck Emerging Markets Bond Fund was up 0.2% in February, in line with its benchmark.
• We increased exposure to local currency (due to increases in Brazil and the Philippines) and increased duration (via hard-currency bonds), in line with the market now pricing out a lot of the Fed’s cuts.
• We end February with carry of 7.1%, yield to worst of 8.6%, duration of 5.5, and 50% of the Fund in local currency.

Originally posted on March 19, 2024

The VanEck Emerging Markets Bond Fund (the Fund) was up 0.2% in February in line with its benchmark, the 50% J.P. Morgan Government Bond Index-Emerging Markets (GBI-EM) Global Diversified and 50% J.P. Morgan Emerging Markets Bond Index (EMBI). Year to date, the Fund is outperforming its benchmark by around 30 basis points (bps). From a country perspective, Zambia and Ecuador were winners, Egypt (not owning it) was a loser. We increased exposure to local currency (due to increases in Brazil and the Philippines) and increased duration (via hard-currency bonds), in line with the market now pricing out a lot of the Fed’s cuts. We end February with carry of 7.1%, yield to worst of 8.6%, duration of 5.5, and 50% of the Fund in local currency. Our biggest exposures are Brazil (local), Mexico (local and hard), Indonesia (local), Colombia (local), and Poland (local)....

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