M&G Emerging Markets Bond
This fund has the flexibility to invest across the whole emerging market bond spectrum. It can invest in both government and corporate bonds, denominated in local currencies or in the US dollar ('hard' currency). The manager uses her vast skill set in this asset class to analyse the macroeconomic environment, and individual companies, to pick what she believes to be the best mix of bonds for this portfolio.
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Claudia Calich joined M&G in October 2013 as an emerging markets debt specialist and began managing the Emerging Markets Bond strategy in December 2013. By July 2015, she also managed the Global Government Bond strategy and was deputy manager of the Global Macro Bond strategy. Since May 2017, Claudia has been involved in managing Luxembourg-domiciled strategies. With over 20 years in emerging markets, her experience includes roles as a senior portfolio manager at Invesco in New York, and previous positions at Oppenheimer Funds, Fuji Bank, Standard & Poor’s, and Reuters. Claudia holds a BA (Honours) in Economics from Susquehanna University and an MA in International Economics from the International University of Japan in Niigata.
Charles de Quinsonas is an emerging market corporate bond specialist at M&G, where he has been co-fund manager and deputy fund manager for several emerging markets corporate bond funds since 2015. With over a decade of experience in emerging market corporate bonds and high yield credit, he previously worked at Spread Research in Lyon and New York, analyzing high yield and emerging market industrial credits. Charles holds a B.B.A. from ESSEC Business School and an MSc in Corporate Finance from iaelyon School of Management.
Claudia Calich joined M&G in October 2013 as an emerging markets debt specialist and began managing the Emerging Markets Bond strategy in December 2013. By July 2015, she also managed the Global Government Bond strategy and was deputy manager of the Global Macro Bond strategy. Since May 2017, Claudia has been involved in managing Luxembourg-domiciled strategies. With over 20 years in emerging markets, her experience includes roles as a senior portfolio manager at Invesco in New York, and previous positions at Oppenheimer Funds, Fuji Bank, Standard & Poor’s, and Reuters. Claudia holds a BA (Honours) in Economics from Susquehanna University and an MA in International Economics from the International University of Japan in Niigata.
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Company Description
Founded in 1931, M&G Investments employs more than 2,000 people worldwide, including 350 investment specialists. The company was formerly owned by Prudential plc, but de-merged in 2019 to become listed on the London Stock Exchange. It focuses primarily on fixed interest and equities, but also invests in multi-asset and real estate. Many of its fund managers have been with the company for more than 20 years. Managers are given freedom to implement their own style on funds.
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Quote from the Fund Manager
Careful and thorough credit research, with a focus on fundamentals, risks and valuations, is key to investing successfully in the emerging debt markets.
Claudia Calich
Co-Manager
Investment process
Claudia and her deputy manager, Charles De Quinsonas, begin by looking at the macroeconomic environment. This includes the analysis of growth, politics, central bank policies, commodity prices and inflation. Their views on these elements will dictate how much risk they want to take at any given point and whether they prefer ‘hard’ or local currency denominations. The asset allocation within the M&G Emerging Markets Bond fund is very dynamic. The managers will then look at individual countries and, if they like a country, they will look at both the government and corporate bonds on offer. They will work closely with their dealing team to ensure they get the best price and can easily trade the holdings if needed.
Risk
In addition to the individual stock analysis carried out by the investment team, M&G's dedicated risk team analyse each holding before it is included in the portfolio. The team carries out a variety of stress tests on factors such as interest rate changes, credit ratings and liquidity. It will also look at any correlations between existing holdings and a variance of currencies. After this, the portfolio has a daily risk monitoring process. The M&G Emerging Markets Bond fund will also be subject to interest rate, credit and currency risks.
ESG
ESG - Integrated
M&G has clear and defined categories for the ESG focus of its fund range. The explicit ESG range includes impact, sustainable and plus features. Other funds have different levels of integration, with a focus on investment stewardship. There are also some company-wide exclusions for all funds, such as cluster munitions.
With this fund, Claudia and the team of credit analysts at M&G incorporate ESG factors into the fundamental analysis of their bond universe. The primary aim of this work is to identify potential downside risks. This is primarily around governance factors such as management structures and leverage levels, but also includes social factors such as corruption or political interference, and environmental factors which could lead to fines or regulation.
They use a proprietary, firm-wide system for scoring ESG, and are supported by the expertise of the wider ESG team. This is not only helpful with thought leadership, but also useful for monitoring and engaging after investment. Debtholders typically have less direct influence than shareholders over a corporate’s strategy, but engaging helps better understand, manage, and potentially reduce ESG risks.
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