Given the evolution of the asset class and several attractive characteristics, we think emerging market debt should be considered a ‘core’ part of an insurer’s public fixed income strategy. Here are the reasons why:
- Credit assets offer a growing insurance market quality investments, liquidity and diversification
- Longer maturities are key to insurers as they seek to match their liabilities. Emerging market debt may offer high-quality duration
- The asset class is complementary to developed market debt, but investors should be mindful of the illiquidity risk and issuer concentration
Authors:
Phil Yuhn, Portfolio Manager Emerging Market Debt, Man Group
Jerry Song, Director, Global Insurance, Man Group