TEI - MS Emerging Markets Debt Fund Review: Emerging Market Bonds Outlook 2024

2024-01-22 13:06:46 ET

Summary

• MSD is a closed-ended fixed-income fund focused on emerging markets, aiming for high income and some capital appreciation.
• The fund has a long history but a small size due to poor performance in EM bonds in the past decade.
• It has been a better performer compared to other long-standing EM debt closed-end funds, with less volatility and risk.
• MSD is a fund to watch for EM bonds exposure in the event of a correction in the asset class in early 2024.

MSD Overview

The MS Emerging Markets Debt Fund ( MSD ) is a closed-ended fixed income fund focused on emerging markets. Within EM, it invests in a range of sovereign, quasi-sovereign, and corporate debt securities. Whilst the primary objective is to produce high income, the secondary objective is to seek some capital appreciation. The mandate allows them to invest in local currency as well as U.S. dollar denominated debt securities. Typically, however, MSD does not run any significant currency risk and neither does it utilize leverage. This makes it somewhat more conservative than some of its EM debt fund peers....

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