PI Partnership – Legal & General Investment Management
momentum, or have reform anchors in place like the IMF or a reform-minded government (e.g. India, Ivory Coast, Oman). These commodity producers and reformers also benefit from stable and improving ratings. Indeed, some of the countries we have exposure to have actually been upgraded in recent months (such as Angola, Gabon, Ivory Coast).
In addition, we view curves and/or bonds that have potential for buybacks favourably as this supports technical analysis and helps lower their beta to the market (Angola, Mongolia, Gabon, Kenya).
Then there are credits which are defensive in nature, with rel- atively lower betas to market moves, due to supportive techni- cals like a small-traded float, participation of local investors, and/or tightly held bonds (Mongolia, Jordan). Finally, we are comfortable with names where valuations are attractive and where we are not overly concerned about funda- mentals given decent external liquidity buffers, lower debt bur- dens, favourable growth dynamics and/or a proven ability to weather exogenous shocks (e.g. Nigeria, Egypt).
Emerging market sovereign and corporate yields EMD Yields; %
4,0 4,5 5,0 5,5 6,0 6,5 7,0 7,5 8,0
EM sovereign yields (EMBI GD)
EM corporate yields (CEMBI BD Source: JP Morgan, via Bloomberg
Important information Past performance is no guarantee of future results. The value of an investment and any income taken from it isnot guaranteed and can go down as well as up, you may not get back the amount you originally invested. Views expressed are of LGIM as at 8 March 2022. The Information in this document (a) is for information purposes only and we are not soliciting any action based on it, and (b) is not a recommendation to buy or sell securities or pursue a particular investment strategy; and (c) is not investment, legal, regulatory or tax advice. Legal & General Investment Management Limited. Registered in England and Wales No. 02091894. Registered Office: One Coleman Street, London, EC2R 5AA. Authorised and regulated by the Financial Conduct Authority, No. 119272
April 2022 portfolio institutional roundtable: Fixed Income
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