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Multi-Manager Emerging Markets Debt Opportunity

as of 12/31/17

Fund Commentary

During the fourth quarter, external emerging markets debt generated a positive return of 1.16% as measured by the JP Morgan Emerging Markets Bond Index Global Diversified. This brought the annual 2017 return to 10.26%.

For the quarter, investment grade outperformed high yield, which was driven primarily by Venezuela returning -28.5%, dragging down the high yield sector. Outside of a few countries, the Index as a whole performed favorably with the Africa region as the top performer, returning 3.45%. Ecuador and Angola had the highest index returns generating 9.14% and 8.51%, respectively. Local markets returned 0.82% for the quarter as measured by the JP Morgan Government Bond-Emerging Market Index Global Diversified. This brought the annual 2017 return to 15.21%. From a country perspective, South Africa was the best performer with a return of 11.56%, followed by Poland with a return of 6.04%. Mexico was the notable laggard, returning -9.23% for the quarter.

The Fund performed in line with its blended benchmark, returning 1.04% for the quarter ending December 31, 2017 compared to 1.01% for the Index. Strong country and issuer selection drove Fund performance and Latin America continued to be a positive theme. Specifically, an overweight to Ecuador contributed positively to the Fund. The Fund's bias toward local debt, at the expense of external debt, was a slight detractor. While the Fund held an overweight position to Venezuela on a market value basis, the Fund's exposure to shorter dated issues mitigated relative losses.


Not FDIC insured | May lose value | No bank guarantee

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