Payden & Rygel’s Payden Emerging Markets Bond Fund Celebrates 25 years of Seizing Opportunity in a Changing Asset Class
01 August 2024 - 1:40PM
Business Wire
In December 1998, financial markets were still reeling from
Russia’s default and, a year earlier, an Asian financial crisis
that upended developing economies all over the world. It was
against this volatile and seemingly inauspicious backdrop that
Payden & Rygel launched the Payden Emerging Markets Bond Fund
(PYEMX). Since then, the fund has captured opportunities in a
rapidly evolving asset class which remains among the
highest-yielding public debt market options for investors.
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Payden & Rygel’s Payden Emerging
Markets Bond Fund (PYEMX) celebrates 25 years of seizing
Opportunity in a changing asset class. (Graphic: Business Wire)
Payden’s team has navigated a market for emerging market debt
that has grown and matured over the past quarter century, now
offering more opportunities than ever to investors. The asset class
includes a broad spectrum of issuers, with investment opportunities
of varying risk/return characteristics. Consider that:
- The number of countries in one of the most widely used emerging
market bond indices has grown from eight to seventy, achieving
diverse regional representation from Central and Eastern Europe,
the Middle East, Africa, Latin America, and Asia.
- While sovereigns are still a core option for investors, unlike
in 1998 investors today can also gain exposure to a large universe
of emerging market quasi-sovereign and corporate bonds.
- Investors no longer need to stick to U.S. dollar or
Euro-denominated bonds: they can buy local currency bonds from both
established and frontier emerging markets.
As the emerging markets debt universe expands and diversifies,
investors have more opportunities to manage volatility. For
instance, while sovereign defaults have recently increased in the
aftermath of the pandemic, the average emerging market economy has
managed to avoid dramatic adverse outcomes such as those in 1997/8
thanks to better economic policy management and stronger external
buffers.
The future looks bright as well. Says Payden Emerging Markets
Bond portfolio manager and managing director Kristin Ceva, “Looking
forward, many EM central banks have already responded to
disinflation by cutting rates, and economic activity in EM
countries has been resilient. A stable growth backdrop, combined
with lower inflation, has resulted in reduced market volatility and
overall support for risk assets. That said, we remain alert to
global and country-specific risk factors.”
“In our view, EM debt offers diversification benefits, and
elevated yields have historically generated healthy long-term
income for investors,” adds Ceva. “Valuations in EM debt are
compelling compared to peer sectors, and we see opportunities
across a variety of hard and local currency markets, making this a
suitable time to reconsider the asset class.”
The Payden Emerging Markets Bond Fund invests in a diversified
portfolio of emerging-market sovereign and corporate bonds. The
fund invests in countries that are identified through extensive
analysis of their macroeconomic variables, sovereign credit ratios,
political stability, and the quality of the country’s business
environment. The fund maintains geographic diversification across
Latin America, Europe, Middle East, Africa, and Asia. Most of its
investments are U.S. dollar-denominated, but there are attractive
opportunities in select local markets.
About Payden & Rygel
With $156.8 billion under management, Payden & Rygel is one
of the largest privately-owned global investment advisers. Founded
in 1983, the firm manages fixed income and equity portfolios
through domestic and international solutions. Advising the world's
leading institutions and individual investors, Payden & Rygel
provides customized strategies across global capital markets.
Payden & Rygel is headquartered in Los Angeles and has offices
in Boston, London, and Milan.
Past performance does not guarantee future results. Investment
returns and principal value will fluctuate, so investors' shares,
when sold, may be worth more or less than their original cost. For
the most recent month-end performance, which may be higher or lower
than that quoted, visit our website at payden.com or call 800
572-9336.
For more information and to obtain a prospectus or summary
prospectus, visit payden.com or call 800 572-9336. Before
investing, investors should carefully read and consider investment
objectives, risks, charges, expenses and other important
information about the Fund, which is contained in these documents.
Investment in foreign securities entails certain risks from
investing in domestic securities, including changes in exchange
rates, political changes, differences in reporting standards, and,
for emerging-market securities, higher volatility. Investing in
high-yield securities entails certain risks from investing in
investment grade securities, including higher volatility, greater
credit risk, and the issues’ more speculative nature. The Payden
Funds are distributed through Payden & Rygel Distributors,
member FINRA.
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Kate Ennis DAI Partners ennis@daipartnerspr.com
(301)580-6726