The Case for Local Currency Emerging Market Debt

Local Currency EM government debt has been through a number of distinct cycles since the early 2000’s when these markets became more liquid, widely traded, and began to be seen as viable investment destinations. After facing a number of headwinds, we believe that the asset class is now well placed to benefit from a sustained upswing. Further US dollar weakness, relatively high and attractive real yields, sound macroeconomic management, and declining inflation across the major economies within the asset class suggest that it is about to undergo a sustained period of strong performance.
Download the paper

The Merits of Emerging Market Sovereign Bonds – Comparing Hard and Local Currency Debt

All investors, to varying degrees, need to balance and trade off three objectives, namely safety, liquidity and return. Their particular circumstances, objectives and risk tolerance will each play a key role in the asset allocation decision of where to invest. In this paper we focus solely on Emerging Market government debt and consider the characteristics and valuations of both the local currency and hard currency segments of this asset class; looking at where opportunities may be sought in the future.
Download the paper

Colchester Sovereign Engagement Framework

Responsible Investing is, and has been since the inception of Colchester, a fundamental part of our investment process. Environmental, Social and Governance (ESG) factors are incorporated along with macro-economic and financial analysis within our investment valuation framework. Please find attached for your interest our ‘Sovereign Engagement Framework’ which explains how we integrate engagement holistically into our investment process. We believe that enhanced and clear policies can improve a country’s business environment, which in turn reduces country investment risk, funding costs, supports economic growth and should ensure more sustainable debt paths.
Download the paper


ESG Engagement For Sovereign Debt Investors

This report has been written with the contribution of the PRI’s Sovereign Debt Advisory Committee (SDAC) of which Claudia Gollmeier, Colchester’s Senior Investment Officer, is the Chair. It aims to provide insights on how sovereign engagement is conducted and where the industry can extend this custom to advance responsible investing.
Download the paper

The Death of Government Bonds has Been Greatly Exaggerated

The global pandemic of 2020 has exacerbated many of the trends that have been evident over recent years, and historic lows in developed market government bond yields have caused concern that the asset class may offer little or no value. This paper discusses our belief in the continued defensive nature of the asset class and its capacity to cushion a downturn in equity markets.
Download the paper


Has Covid-19 Thrown Up Value in the Local Currency Emerging Market Debt Universe?

Colchester have provided an analysis of the local currency emerging sovereign bond markets in light of recent events and beyond.
Download the paper

Overnight Cash Rates in New Zealand

With speculation that the RBNZ might lower the Overnight Cash Rate into negative territory, Colchester offers some comment on why it could go negative and what it might mean.
Download the paper

Scope Analysis

Green Bonds – Assets Under Management more than double in one year

“The rising popularity and issuance activity of green bonds is leading to significant growth in green bond funds – both in terms of the number of funds and the assets under management. A total of four new Green Bond funds have been launched this year. These are products of the asset managers Franklin Templeton, Colchester Global Investors, Degroof Petercam and Lyxor. Here, Scope Analysis discusses the current Green Bond Fund market and outlook.”
Download the paper


A practical guide to ESG Integration in Sovereign Debt

Claudia Gollmeier, Colchester Senior Investment Officer and as Chair of the PRI Sovereign Working Group, has contributed to this paper and it's case studies; specifically the foreword on page 7, plus pages 22, 29 and 49.
Download the paper

Colchester – Global Bond Investing in an Era of Negative Interest Rates

Navigating the prevalent negative bond yielding environment is leaving investors perplexed. This article addresses the misconception that positive returns cannot be delivered from government bonds with negative nominal yields and looks at the opportunities available across global sovereign markets.
Download the paper