Payden & Rygel’s emerging market bond strategy can contribute additional absolute returns as a stand-alone investment vehicle or it can be combined with other strategies to provide diversification and potentially enhance returns.

The firm’s strategy utilizes a top-down process that begins with sovereign risk analysis, augmented by frequent research trips to emerging market countries in Latin America, Europe and Asia. Payden & Rygel focuses on countries with improving fundamentals that are identified through extensive analysis of their macroeconomic variables and sovereign credit ratios, political stability, and the quality of the country’s business environment.

Careful consideration of both regional and country diversification minimizes volatility versus conventional emerging market indices, such as the J.P. Morgan EMBI Plus, which tend to be heavily concentrated in Latin America and in a few countries.

The firm generally purchases primarily dollar-pay or euro-pay bonds issued by governments and corporations, and may opportunistically buy local currency bonds. Government bonds are the primary focus of the strategy; corporate bonds are used opportunistically, and normally do not make up more than 20 percent of the portfolio.

More information on Payden & Rygel's fixed-income, equity and balanced investment strategies.