Investment Memo

Prudent Exposure to Emerging Markets

The expression “emerging markets” often evokes images of faraway lands with unstable governments and boom-bust economic cycles. However, emerging markets have matured in recent years with improving sovereign creditworthiness and relative economic stability leading to expanded depth and breadth of debt offerings. As such, emerging market (EM) bonds have become a viable investment option for conservative fixed income managers. At Merganser, we believe that investments in the debt of a select group of EM corporate issuers can add diversification and yield with only marginal incremental risk to an investment-grade focused portfolio.