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Confidential & Proprietary. Use of this material without permission of Petercam is prohibited.
EMERGING MARKETS GOVERNMENT DEBT: SEEKING SUSTAINABLE RETURNS
THIERRY LAROSE, SENIOR FUND MANAGER, and ALESSANDRO FONZI, CFA, COUNTRY HEAD ITALY
Lugano – Milano, 4 – 5 November 2014
INSTITUTIONAL ASSET MANAGEMENT
Contents
2
|2 Petercam as Responsible Investor
|3 Country Sustainable Rankings
|4 Petercam L Bonds Emerging Markets Sustainable
|5 Contact Details
3
Petercam is an independent active player in traditional asset classesPresent on European scale and with excellent track record
Independent partnership
Creation – Merger in 1968 of two family-owned brokers:
Peterbroek and Van Campenhout
Shareholders’ structure
•70%: 12 active partners
•30%: 2 founding families
Structure
Privately owned investment firm: not a bank and not listed
Shareholders’ Equity 155 M€
Petercam Institutional Asset Management (IAM) SA/NV is
wholly owned by Petercam SA/NV
European network with 423 employees among which 105 at
IAM
Active asset manager
Niche player / boutique - long only traditional asset classes
Active manager, outperformance by exploiting market inefficiencies
and driven by conviction
Solid track record in terms of risk adjusted performances based on in-depth fundamental research
Consistent and disciplined investment processes
Pan European presence
4
Institutional Asset Management
Discretionary management
Traditional Asset classes: equity, fixed income, listed real estate and money
market
Balanced and specialized mandates
End clients: public-corporate pension funds, insurance cies, governmental
institutions and non profit
Intermediairies’network of private/retail banks, fund of funds, family offices
Private Banking
Discretionary
Advisory
Personal management services
Allocation of assets, estate and financial planning
Clients: private individuals, families and trusts
Investment Banking
Brokerage
Prominent independent stockbroker in the Benelux
Specialized model based on local expertise, including a bond desk
Corporate Finance
Leading independent advisor in the Benelux
M&A, equity capital markets, private placements, corporate finance advisory,
structured finance
Petercam is active in three business units Diversity and stability ensured to the structure
Evolution of Assets Under Management
5
Bln
EU
R 14.1714.68
13.1913.64 13.98
14.37
9.72 9.41
8.28 8.61 8.59 8.72
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
2009 2010 2011 2012 2013 201406
Petercam Petercam IAM
Petercam IAM areas of expertise
6
European & Global Equities, European and Global Fixed Income and European
Listed Real Estate
EQUITY
Core European equities: Euroland, European, Small & Midcaps,
European listed real estate (RE)
Dividend franchise: Europe, (listed) RE Europe, North America, World
International: World, Agrivalue and Global opportunity.
FIXED INCOME
Euro Money Market
Euro (Short term) governmentbonds
Global Inflation Linked
Investment Grade (Short term) Euro credit
Global unconstrained
High yield: global, Euro Short Term, Euro ‘benchmarked’
GLOBAL BALANCED
Traditional approach: defensive, balanced, dynamic
Flexible approach: patrimonial
Client solutions: tailor made (Lifecycle, LDI, Fundamental
benchmark)
RESPONSIBLE INVESTMENT
Equity: Europe (best in class) and World (exclusion &
engagement)
Fixed Income:
Best in Class
OECD debt and Emerging (sovereign) debt (both)
Petercam IAM areas of expertise
7
UCIT IV SICAV
Petercam B Fund:SICAV of
Belgian law, mainly equity funds
Petercam L Fund: SICAV of
Luxembourg law mainly fixed income
and balanced
Pan European registration
Expertise offered on a pan European scale
Investment funds registered for public sale in the Benelux, France, Switzerland,
Spain, Italy and Germany
Equities
Europe
31%
Equities rest
of the world
8%
Bonds Europe
41%
Bonds rest of
the world
9%
Money-
market
5%
Listed Real
Estate
6%
Breakdown by geography
BALANCED
26%
EQUITIES
32%
FIXED INCOME
27%
FUND of FUND
8%
MONEY MARKET
7%
Breakdown by Asset class
Expertise via institutional mandates or funds – breakdown of AUM
Source: Petercam IAM - data as of 31.12.2013
Base: Petercam IAM AUM Bln EUR 8.6
Petercam IAM Investment philosophy
8
Fully invested with a long-term
horizon
Outperformance and risk
control
Traditional asset classes
Adding value and generating alpha for long-term investors
Consistent and disciplined outperformance remaining within a well-defined framework
Traditional management approach applied to transparent investment products
Combination of Top-down and
bottom-up
Top-down oriented (investment themes) combined with strong bottom-up analysis (stock
picking)
Active managementNo benchmark-thinker, alpha generation is the key objective - portfolios have a high
‘active share’
Research drivenThrough in-house research teams (buy side credit and financial analysts) complemented
with diverse external sources
Independent asset managerAn independent investment manager which concentrates on managing portfolios in a
‘long-term partnership’ for its clients
Petercam IAM main characteristics
9
Team driven decision
making
Diversified product-offering
Pan European expansion
All investment professionals work in close collaboration and are organized into agile and
efficient teams, sitting together in the same open office space
Focused on the asset classes where we as a European oriented investment firm can add value:
European Equities, global thematic equities, European and global Fixed Income
Gradually expanding the core (“Benelux”) market: pan European registration for distribution
of core products, and hiring local institutional sales team
Risk AwarenessIndependent and dedicated team - taking into account the different sources of risk influencing
performance and evolution of client assets
Innovative and adaptiveAdapt to changing pace in financial markets, addressing the needs of institutional clients,
seize opportunities and a solution-driven behavior
Contents
10
|1 Petercam and Petercam Institutional Asset Management (IAM)
|3 Country Sustainable Rankings
|4 Petercam L Bonds Emerging Markets Sustainable
|5 Contact Details
|Signatory of the UN PRI in September 2011
|Responsible shareholder – Voting policy and active participation in companies in portfolio
|Raising questions – investing in full knowledge of the facts� ESG integration� ESG awareness increase
� Responsible Investment Corner, quarterly event, in order to raise consciousness amongst Petercam staff to ESG issues
� Examples: Biofuel versus food, Micro finance, Nuclear after Fukushima, Shale Gas and environmental consequences, Nano technology
|Committed to transparency and more sustainable finances
|Means:
Set up of the RI Committee
� Members from diversified business lines
� Pro-activity to enhance SRI and ESG issues within Petercam
RI Coordinator
� Steers all initiatives, projects and methodologies related to SRI aspect
� Responsible for streamlining initiatives regarding ESG challenges
� Privileged contact person for the UN PRI and other stakeholders (Beama, Eurosif, FIR, etc.)
Petercam as a Responsible Investor
11
Petercam Responsible Investment Committee
12
ESG integration: a pragmatic approach …
13
|Petercam core business is asset management – No legitimacy to say what is sustainable or not
|No thematic investments nor sector exclusions (for mainstream funds)
� To avoid the SRI consensus and its market counter effects (bubble on environment or on water,
typical underweight in metals & mining, etc.)
|To put the companies in their respective GLOBAL environment – even if complex due to all
interconnections!
� Sustainable development will pay, in the long run
|Best in class approach without any exclusion
|To raise consciousness regarding ESG issues, which are undisputable in a close future
|Increasing number of studies proving that best scoring ESG companies outperform the others
(lower cost of capital, accounting and financial performance)
• Human rights respect
• Corporate Governance
• Corruption prevention
• Non discrimination
• Labour rights respect
• Environment sustainability
• Etc.
|In-house dialogue – Critical spirit
|Dialogue with the invested companies – Ideas sharing
� No aggressive shareholding activism but engaged dialogue
� Management meeting
� Voting policy
|Dialogue with experts and specialists – Open minded
… based on dialogue
14
To make progress towards a more sustainable finances for tomorrow
ESG integration: key principles for success
15
|Key material and discriminating ESG issues
� The ESG criteria have an impact on the company valuation
� They need to be able to discriminate between competitors
|Medium term learning process
� Learning process: it needs to evolve alongside experience, knowledge and evolution
� Medium-term: criteria have no immediate impact; they will make a difference over the
medium-term. Criteria need to be tested on a limited horizon (min. 1 year) to assess relevancy,
reactivity, ability to make distinction between competitors (leaders versus laggards)
|Engaged dialogue and promotion of Best Practices:
� Engaged dialogue between the SRI and financial expertise's within and outside Petercam i.e.
close interaction between SRI team and Buy-side analysts/PM and dialogue with the company
management (and other stakeholders) including ESG issues.
� Promotion of best practices: there are no sectors which are not sustainable as such per
definition. For sectors, which could be considered as “unsustainable”, the approach remains
the same namely privileging best practice promotion and identifying leaders and laggards in
the ESG field.
ESG Integration: Framework
16
Assessment of intangible value of the organisation
Sustainable strategies
17
|Longstanding experience in 2 asset classes: European equities and Sovereign bonds
� Robust SRI screening and process at the starting point of the investment universe
� International recognition
� International institutional investors
� French label Novethic (3 expertises) and compliant with Belgian recommendations
� In-house developed models based on external and independent research and scrutinised and
approved by Scientific Advisory Committee
|Other strategies are SRI tilted due to their philosophy and investment process
� Petercam Equities AgriValue: the demographic challenge combined with climate change –
investment opportunities could also bring some solutions.
Contents
18
|1 Petercam and Petercam Institutional Asset Management (IAM)
|2 Petercam as Responsible Investor
|4 Petercam L Bonds Emerging Markets Sustainable
|5 Contact Details
1 – Sustainability country screening: 8-years of learning curve
19
|Petercam pioneer in sustainability screening of countries
� Over 8 years of experience – OECD model from 2007
� Learning process – constant improvement of the model
|Petercam core business is asset management – No legitimacy to dictate what is sustainable or not
|Reliance on a Scientific Advisory Council: the Fixed Income Sustainable Advisory Board (FISAB)
� 3 external experts & 3 internal experts
� Various backgrounds: bio engineer with soil conservation expertise, international politics, economics
� Active in diverse social & environmental organisations
� Responsibility: definition & control of the model
� Decide which criterion will be withheld and what weight will be attributed to each criterion
� Determine which countries will be qualified into the investable universe of the fund
� Debate on important SRI events
|Reliance on undisputable sources to set up the most objective as possible quantitative model
1 – Sustainability country screening: 7-years of learning curve
which have paid off
20Source: Point, JP Morgan, Petercam – 30/09/2014
1 – Petercam proprietary research model for country screening
21
|The five Sustainability Pillars: a sustainable country needs
1. Transparency & democratic values
2. Environment
3. Population, Health care and wealth distribution
4. Education
5. Economics
|The Underlying Principles of the model
� Quantitative model to avoid as much subjectivity as possible
� Variables that can be influenced by a country
� Comparable data available from reliable sources
� Approval process by an external specialised advisory board
1 – Sustainability screening in the OECD Member States
22
|OECD Model (live since end 2007)
Source: Petercam, 30/9/2014
1 – Petercam’s sustainability screening in the OECD Member
States - latest ranking
23
|Allowed investment universe: the best 50% of the universe
Source: Petercam- 30/9/2014
2 – Petercam proprietary country screening
Innovation in emerging countries
24
|Definition of Emerging Markets:
� No specific definition ⇨ Broad & pragmatic approach
� Broad to ensure the highest level of diversification opportunities
� Pragmatic to remain in line with the reality of the financial markets:
- Combination of 3 benchmark universes i.e.:
1. Barclays Capital Emerging Markets (local currency)
2. JP Morgan Emerging Markets Bond Index Global Diversified (EMBIG Diversified)
3. JP Morgan Next Generation Markets index (NEXGEM)
|Petercam has enlarged the universe for fixed income market and currency opportunities
|It resulted in 84 countries, which are diversified in terms of economic « advancement »
and in terms of democracy level.
2 – Petercam proprietary country screening
Innovation in emerging countries
25
| Petercam is convinced of the sources of added value of sustainable strategies:
� The alpha coming from the sustainable screening, which helps to avoid the tail risks
� The alpha coming from the portfolio management, adopting an active management approach
based on fundamental and qualitatively disciplined process
|There is increasing evidence that sustainable strategies offer a lower volatility than their
traditional alternatives
|Study from the World Bank establishes a positive correlation between the role of
institutions within a country and default probability
|Sustainability assessment is complementary to traditional credit assessment
� Map of the risk situation in terms of sustainability
2 – Sustainability screening in the Emerging Economies
26
|Emerging Economies (2014 evolution)
Source: Petercam- 30/9/2014
2 – Emerging economies: Democracy as key to success –
Normative screening
27
|Minimum of democratic values to be ensured
|Petercam, no legitimacy to qualify a country as democratic or not – Use of 2 undisputable sources: NGO
Freedom House and The Democracy Index published by the Economist
� To qualify as an "electoral democracy", a state must have satisfied the following criteria
� A competitive, multiparty political system;
� Universal adult suffrage for all citizens (with exceptions for restrictions that states may legitimately place on citizens as sanctions for
criminal offenses);
� Regularly contested elections conducted in conditions of ballot secrecy, reasonable ballot security, and the absence of massive voter
fraud that yields results that are unrepresentative of the public will; and
� Significant public access of major political parties to the electorate through the media and through generally open political
campaigning.
� Freedom House ranks countries in 3 groups: free, partially free and not free
� Not free countries, confirmed as « authoritarian » in the Democracy Index from the Economist are excluded from
the investable universe.
|19 countries are excluded: United Arab Emirates, Jordan, Kazakhstan, Gabon, Belarus, Bahrain, Saudi
Arabia, Russia, Azerbaijan, Algeria, Vietnam, China, Angola, Congo (Brazzaville), Rwanda, South
Sudan, Sudan, Zimbabwe and Egypt
2 – Investing with conviction: no opportunity cost
28
|Freedom House yearly survey – methodology based on Universal Declaration of Human Rights
Source: Bloomberg, Petercam
2 – Sustainability screening in the Emerging Economies
Latest ranking
Eligible universe:
- NO red countries
- Min. 40% in1st
quartile
- Max. 10% in the bottom quartile
29
Source: Petercam-
30/9/2014
# Country H2 14 H2 13 # Country H2 14 H2 13
1 Poland 71 66 43 El Salvador 52 55
2 Hungary 69 65 44 Jordan 51 52
3 Lithuania 69 66 45 Armenia 51 -
4 Uruguay 69 64 46 Taiwan 51 56
5 Czech Republic 69 63 47 Thailand 51 54
6 Costa Rica 68 66 48 Paraguay 51 54
7 Croatia 67 63 49 Indonesia 50 53
8 Chile 67 63 50 Venezuela 50 55
9 Bulgaria 66 60 51 Guatemala 50 52
10 Romania 65 61 52 Bolivia 49 48
11 Serbia 64 63 53 Kazakhstan 49 50
12 South Korea 64 59 54 United Arab Emirates 49 47
13 Argentina 63 61 55 Senegal 49 51
14 Albania 63 - 56 Algeria 49 51
15 Montenegro 63 67 57 Azerbaijan 48 51
16 Ecuador 62 60 58 Morocco 47 48
17 Brazil 61 60 59 Tanzania 47 53
18 Panama 61 60 60 Bahrain 47 51
19 Belize 61 67 61 Sri Lanka 46 50
20 Israel 61 60 62 Saudi Arabia 46 43
21 Singapore 61 52 63 Egypt 46 48
22 Georgia 60 60 64 Russia 45 50
23 Tunisia 60 56 65 Rwanda 45 49
24 Namibia 60 55 66 Malawi 45 51
25 Jamaica 60 57 67 Zambia 45 46
26 Mongolia 60 56 68 Iraq 45 46
27 Macedonia 60 - 69 Aruba 45 42
28 Turkey 59 58 70 Kenya 44 48
29 Mexico 59 59 71 Lebanon 43 47
30 Dominican Republic 59 58 72 Vietnam 43 44
31 Hong Kong 59 51 73 India 41 46
32 Peru 59 57 74 Côte d'Ivoire 41 44
33 Philippines 59 59 75 Uganda 41 47
34 Colombia 58 59 76 China 40 43
35 Malaysia 58 53 77 Angola 40 44
36 Trinidad and Tobago 58 57 78 Zimbabwe 40 40
37 Gabon 58 54 79 Pakistan 39 44
38 Ukraine 58 57 80 Mozambique 38 41
39 Belarus 58 52 81 Nigeria 37 41
40 South Africa 57 55 82 Sudan 35 39
41 Botswana 57 52 83 Congo 30 32
42 Ghana 57 54 84 South Sudan 26 31
Top quartile countries Bottom quartile countries
Second and third quartile countries Not free countries
2 – Sustainability screening in the Emerging economies
It pays off!
30
2 – Sustainability screening in the Emerging economies
It pays off! Downside risk versus market and peers
31
2 – Sustainability screening in the Emerging economies
It pays off! Sources of Alpha
32
Source: Point, JP Morgan, Petercam – 30/09/2014
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
Fund versus SRI index SRI index versus Benchmark Fund versus Benchmark
2.18%
0.95%
3.13%
2 – Sustainability as complementary to financial expertise
33Source: Point, JP Morgan, Petercam – 30/09/2014
Contents
34
|1 Petercam and Petercam Institutional Asset Management (IAM)
|2 Petercam as Responsible Investor
|3 Country Sustainable Rankings
|5 Contact Details
Well-known factors explaining the
secular trend of currency appreciation
and yield compression in EM sovereign
debts
Favorable trends
in demographics
and urbanization
Globally
healthier
Balances of
Payments
Improving
creditworthiness
Monetary and
budgetary
firepower
Sustainable
indebtedness
and fiscal
discipline
Inflation
expectations
more anchored
Emerging Markets: A Virtuous Combo Of Macro Factors
35
Emerging Markets: Higher Productivity
The long-term increase in productivity growth reflects a strengthening of the
efficiency with which EM economies have used labour and capital in productive
economic activity.
Trend growth in Total Factor Productivity
Source: The Conference Board Total Economy Database™36
Emerging Markets: GDP Per Capita Catching Up
Sources: Petercam, DataStreamSources: Barclays research, IMF
37
Emerging Markets: The “Balassa-Samuelson Effect”
Sources: Barclays, IMFSources: Australian Treasury, Penn World Table
In real terms, productivity gains in tradable-goods sector translate into higher
growth per capita that leads to currency appreciation in real effective terms
38
Emerging Markets: The Great Rebalancing
Source: Crédit Agricole CIB
39
Emerging Markets: Freeing From Dollarization
Source: ING
-10,000
-5,000
0
5,000
10,000
China Asia ex-China EM Europe CIS ME&Africa Latam
The flipside of EM reserves growth has been a mirroring rise of local debt as policy makers strive to curtail the inflationary impact.
Sources: BIS, BofA Merrill Lynch, Bloomberg
40
Emerging Markets: Still Attractive Risk-Adjusted Returns
Monthly data from 31/12/2002 to 30/09/2014 *** Petercam calculations (sources: JPMorgan, Bank of America Merill Lynch, MarkIt)41
Contents
42
|1 Petercam and Petercam Institutional Asset Management (IAM)
|2 Petercam as Responsible Investor
|3 Counntry Sustainable Rankings
|5 Contact Details
Long Term Returns – It’s All About The Carry …
Normalized daily data from 31/12/2002 to 12/09/2014 *** Sources: JPMorgan, Petercam calculations
GBI-EM Global Diversified Index: Performance Attribution
43
… And The Carry Is There!
Daily data from 31/12/2002 to 17/10/2014 *** Sources: JPMorgan, Bloomberg
Yield differential between GBI-EM Global Diversified and Global Aggregate Index
44
... But Time To Separate The Wheat From The Chaff
Source: Peterson Institute for International Economics, May 2014
Change in REER required to address external imbalances (%)
45
Outflows – Not All Investors Have Been Rushing to The Exit
Sources: EPFR Global, various Finance Ministries and Central Banks, HSBC calculations 46
Correlation matrix of carry-trade returns
Daily data from 01/01/2008 to 15/09/2014 *** Sources: Standard Bank, Petercam calculations
AOA = Angolan kwanza
EGP = Egyptian pound
GHS = Ghana Cedi
KES = Kenyan shilling
NGN = Nigerian naira
MWK = Malawi kwacha
MUR = Mauritian rupee
ZAR = South African rand
UGX = Uganda shilling
TZS = Tanzanian shilling
ZMK = Zambian kwacha
AOA BWP EGP GHS KES NGN MWK MUR ZAR UGX TZS ZMK
AOA 100% -3.51% 1.42% -1.57% -1.95% -2.35% 0.37% -1.04% -1.39% -2.96% -6.35% -1.60%
BWP 100% 4.92% 1.38% 12.65% 8.98% 0.37% 7.19% 46.53% 11.10% 2.36% 20.27%
EGP 100% -0.09% 4.88% -3.73% -2.13% 1.78% 4.89% 8.90% 2.83% 10.76%
GHS 100% 2.45% 5.72% -2.13% 1.38% 0.07% 0.87% -1.85% 0.43%
KES 100% 0.09% 4.56% -0.47% 5.13% 15.66% 4.77% 13.97%
NGN 100% 0.09% 3.37% 0.67% 1.98% 3.64% 1.65%
MWK 100% -1.30% -0.32% 2.65% -2.10% 3.22%
MUR 100% -1.84% 5.11% 1.68% 2.83%
ZAR 100% -1.70% -3.45% 4.19%
UGX 100% 10.36% 23.83%
TZS 100% 12.14%
ZMK 100%
47
Sub-Saharan Africa – Low Correlation
Contents
48
|1 Petercam and Petercam Institutional Asset Management (IAM)
|2 Petercam as Responsible Investor
|3 Country Sustainable Rankings
|5 Contact Details
Philosophy – Investment Objectives
Scope /
Investment
universe
To invest in sovereign debt instruments issued by emerging countries,
and in supranational eurobonds denominated in emerging country local
currencies. according to environmental, social and governance criteria
(Sustainability screening).
Active management based on fundamental and qualitative research
with a strong risk control management
Investment
objective
To seek revenue and capital growth through access to the returns
available from the EM debt securities denominated in local currencies,
taking into account sustainable criteria
Benchmark No benchmark, total-return approach
Sustainability
Min. 40% of the portfolio in the top quartile
Max. 50% of the portfolio in the 2nd and 3rd quartiles
Max. 10% of the portfolio in the last quartile
Management style
Practical info
Sicav UCITS under Luxembourg law
Management fees: 50 bps institutional share classes
Launch date: 18/03/2013 @ €100
49
Portfolio Construction - A Disciplined Process
Yield curve
positioning
Credit picking for
capital protection
Currency picking as
the main performance
engine
Macro analysis and
geographical allocation
SRI screening – determining an investable universe
Tuning the Beta
Angle of the strategy
Top-down selection
Bottom-up selection
Optimization
50
Risk profiling – assessing global liquidity and
adjusting appetite for risk
TURKEY
SERBIA�Local real yields are attractive and foreign positioning is still relatively low
�Potential for growth in FDI to close the gap in the Balance of Payments
�Progress towards reforms is unavoidable in order to seek EU membership and
IMF support
�Central Bank has a lot of room to ease on the back of falling inflation
�Large Current Account deficit, too dependent on volatile portfolio inflows for
its financing
�Significant currency depreciation unable to restore external imbalances
�Authoritarian drift in politics could be a threat to credibility and stability
�Poor attractiveness of the currency from a carry-trade perspective
51
Bond-Picking Driven By Fundamental Analysis …
Source: Petercam (date: 16/09/2014) 52
… And By Relative Value Considerations …
Source: Petercam (date: 16/09/2014) 53
… While Keeping An Eye On Global Appetite For Risk
Contents
54
|1 Petercam and Petercam Institutional Asset Management (IAM)
|2 Petercam as Responsible Investor
|3 Country Sustainable Rankings
|5 Contact Details
Normalized performance in unhedged EUR vs. selected peers (18/03/2013 – 22/10/2014)
Sources: Bloomberg, Petercam ; calculations for the
Petercam L Bonds Emerging Markets Sustainable – B
Annualized Volatility5.61% Petercam L - Bonds Emerging Markets Sustainable (EUR)6.72% Franklin Emerging Market Debt Opportunities Fund (EUR)7.30% Franklin Templeton Investment Funds - Templeton Emerging Markets Bond Fund (EUR)7.58% PIMCO Global Investors Series plc - Socially Responsible Emerging Markets Bond (EUR)7.75% JPMorgan Emerging Markets Debt Fund (EUR)7.96% Fidelity Funds - Emerging Markets Debt (EUR)7.97% HSBC Global Investment Funds - Global Emerging Markets Local Debt Fund (EUR)7.99% Candriam Bonds Emerging Debt Local Currencies (EUR)8.06% BlackRock Emerging Markets Flexible Dynamic Bond Portfolio (EUR)8.09% KBC Bonds Emerging Markets (EUR)8.50% Carmignac Portfolio - Emerging Patrimoine (EUR)8.54% Morgan Stanley Institutional Fund Inc - Emerging Markets Domestic Debt Portfolio (EUR)8.64% Investec Global Strategy Fund Limited - Emerging Markets Local Crncy Debt Fund (EUR)8.79% HSBC Global Investment Funds - Global Emerging Markets Bond (EUR)8.86% PIMCO Funds Global Investors Series PLC - Emerging Local Bond Fund (EUR)9.06% Goldman Sachs Local Emerging Markets Debt Fund (EUR)9.15% Ashmore SICAV - Emerging Markets Local Currency Bond Fund (EUR)9.60% Pictet - Global Emerging Debt (EUR)9.99% Pictet - Emerging Local Currency Debt (EUR)
55
Performance Versus Selected Peers Since Inception
Region Weights 1st quartile >40% 48.44% Currency WeightsCEE 39% 2nd + 3rd quartiles <50% 40.57% USD 13%Latin America 24% 4th quartile <10% 9.47% RON 12%Southern Africa 11% Cash 1.53% EUR 8%ASEAN 10% % hard currency <30% 21.14% HUF 7%East Africa 4% ZAR 7%South Asia 4% Yield to Maturity 6.02% COP 7%CIS 3% Macaulay Duration 7.57 RSD 6%West Africa 2% Externals' Modified Duration 5.92 MYR 5%Cash 2% Locals' Modified Duration 7.62 BRL 5%East Asia 0% DV01/NAV 0.18% CLP 4%CARICOM 0% Convexity 0.99 MXN 4%North Africa 0% Composite Rating BBB INR 4%Middle East 0% PHP 3%Total 100% KES 3%
CZK 3%PEN 2%GHS 2%UGX 1%IDR 1%THB 1%Total 100%
56
Positioning And Main Analytics as of October 22, 2014
57
Risk Monitoring Using Advanced Analytics Tools
Contents
58
|1 Petercam and Petercam Institutional Asset Management (IAM)
|2 Petercam as Responsible Investor
|3 Country Sustainable Rankings
|4 Petercam L Bonds Emerging Markets Sustainable
Contact details
59
Petercam SA – Succursale italiana
Via Monte di Pietà 21
20121 Milano
Tel.: +39 02 86337 223
Fax: +39 02 86337 400
Website: www.petercam.com
Team presentation:
Thierry Larose
Senior Fund Manager Fixed Income
Tel.: +32 2 229 6666
Alessandro Fonzi, CFA
Country Head Italy & Ticino
Tel.: +39 348 4912 696
60
GROWTH AND VALUE CREATION IN
ASSET MANAGEMENT IS BASED ON
PEOPLE, PROCESS AND
PERFORMANCE
DISCLAIMER
61
The information contained in this mail and attachments (hereafter the ‘documents’) is provided for pure information purposes only.
Present documents don’t constitute an investment advice nor do they form part of an offer or solicitation for shares, bonds or mutual
funds, or an invitation to buy or sell the products or instruments referred to herein.
Applications to invest in any fund referred to in this document can only validly be made on the basis of the Key Investor Information
Document (KIID), the prospectus and the latest available annual and semi-annual reports. These documents can be obtained free of
charge at the financial service provider (Petercam S.A., Place Sainte-Gudule 19, 1000 Brussels) or at the website funds.petercam.com.
All opinions and financial estimates herein reflect a situation on the date of issuance of the documents and are subject to change
without notice. Indeed, past performances are not necessarily a guide to future performances and may not be repeated.
Petercam Institutional Asset Management S.A. (“Petercam IAM”) has made its best efforts in the preparation of this document and is
acting in the best interests of its clients, without carrying any obligation to achieve any result or performance whatsoever. The
information is based on sources which Petercam IAM believes to be reliable. However, it does not guarantee that the information is
accurate and complete.
Present document may not be duplicated, in whole or in part, or distributed to other persons without prior written consent of
Petercam IAM. This document may not be distributed to private investors and is solely restricted to institutional investors.