Fidelity Emerging Markets Limited Red Pref Shs GBP · LSE:FEML
Fidelity Emerging Markets Limited Red Pref Shs GBP — DPAM L Bonds Emerging Markets Sustainable — Investor Presentation (January 2023)
75 slides from Fidelity Emerging Markets Limited Red Pref Shs GBP's investor presentation, January 2023
Slide 1: DPAM L Bonds Emerging Markets Local Currency Sustainable
Marketing document DPAM L BONDS EMERGING MARKETS LOCAL CURRENCY SUSTAINABLE January 2023
Slide 2: Disclaimer
DISCLAIMER Degroof Petercam Asset Management sa l rue Guimard 18, 1040 Brussels, Belgium l RPM/RPR Brussels l TVA BE 0886 223 276 © Degroof Petercam Asset Management SA/NV, 2022 all rights reserved. This is a marketing communication. This document may not be distributed to retail investors and the u
Slide 3: Strategy, Portfolio, Why, Outlook, Appendix
STRATEGY PORTFOLIO WHY? OUTLOOK APPENDIX HIGHLIGHTS CHARACTERISTICS Why Emerging Markets? Key features & Portfolio Overview Theme overview Share class details Investment philosophy Why Sustainable? Performance Head and Local Investment process Offices Why Emerging Markets Risk/return vs peer group S
Slide 4: Why?
WHY? Why Emerging Markets? Why Sustainable? Why Emerging Markets Sustainable at DPAM? 4 Marketing document
Slide 5: EM Debt Market Structure
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - Local debt is much larger than external debt market - EM DEBT MARKET STRUCTURE 100% 45,000 40,000 80% 35,000 30,000 60% 25,000 20,000 40% 15,000 20% 10,000 5,000 0% 0 CE Balkans CIS Asia Latam SSA MENA Total 2002 200
Slide 6: It's the Carry
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - In the long run, the carry is realized - “IT’S THE CARRY” Source: DPAM, JP Morgan 6 Marketing document
Slide 7: High Dispersion of Returns
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - Potential for adding value through active management - HIGH DISPERSION OF RETURNS Source: Bloomberg, DPAM, Year-to-date local returns in EUR till December 29th , 2022 7 Marketing document
Slide 8: Why Sustainable?
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING WHY SUSTAINABLE? Foundation for a positive economic development in a sustainable way. High quality governing institutions and social rest are keys for sustainable growth and stable economic environment. Optimizat
Slide 9: Why EMD Sustainable at DPAM?
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - Long-standing track record in both EMD and Sustainable investments - WHY EMD SUSTAINABLE AT DPAM? ACTIVE SUSTAINABLE RESEARCH ASSET MANAGER INVESTOR DRIVEN DPAM is an independent active asset CLIENT-DRIVEN, creating
Slide 10: SFDR Positioning
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING SFDR POSITIONING RESPONSIBLE INVESTMENT SUSTAINABLE INVESTMENT BASIC NORMATIVE & EXTENSIVE POSITIVE ESG ACTIVE SUSTAINABILITY NEGATIVE NEGATIVE NEGATIVE SCREENING INTEGRATION OWNERSHIP THEMES SCREENING SCREENING SCREEN
Slide 11: Marketing document
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING 11 Marketing document
Slide 12: Marketing document
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING 12 Marketing document
Slide 13: Credible Sustainability Approach: LuxFLAG ESG Label
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - Externally recognized by an independent third party - CREDIBLE SUSTAINABILITY APPROACH DPAM L Bonds Emerging Markets Sustainable received the LuxFLAG ESG Label (from 2018 onwards) The Luxflag ESG label is the sustain
Slide 14: Credible Sustainability Approach: Towards Sustainability Label
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - Externally recognized by an independent third party - CREDIBLE SUSTAINABILITY APPROACH DPAM L Bonds Emerging Markets Sustainable received Febelfin’s ‘Towards Sustainability’ label (from November 2019 onwards) The Tow
Slide 15: Strategy Highlights
STRATEGY HIGHLIGHTS Investment philosophy Investment objectives Key features Investment process 15 Marketing document
Slide 16: Investment Philosophy
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - Actively managed, highly diversified portfolio based on a Sustainability Screening process - INVESTMENT PHILOSOPHY EMERGING & DEVOLPING ACTIVELY ACTIVE FUNDAMENTAL PREFERENCE FOR LOCAL CURRENCY SUSTAINABLE MANAGEMENT
Slide 17: Key Features & Investment Philosophy
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING KEY FEATURES & INVESTMENT PHILOSOPHY SUSTAINABLE APPROACH ACTIVE MANAGEMENT HIGHLY DIVERSIFIED HIGH QUALITY Eligible Universe No Benchmark Rank countries based on five Country and Security Selection Sovereign Debt dime
Slide 18: The World Is So Much Larger Than Benchmarks
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - Diversification is most probably “Market’s only Free Lunch” - THE WORLD IS SO MUCH LARGER THAN BENCHMARKS Source: DPAM, July 2022 18 Marketing document
Slide 19: Diversification Is Key
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - Diversification is most probably “Market’s only Free Lunch” - DIVERSIFICATION IS KEY Source: Bloomberg, DPAM, 2020 and 2021, weekly data, Base Currency USD 19 Marketing document
Slide 20: Investment Objective
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING INVESTMENT OBJECTIVE Offer investors exposure, through an actively managed portfolio, to debt securities issued or guaranteed by emerging countries, selected based on sustainable development criteria. The sub-fund has
Slide 21: Investment Process
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING INVESTMENT PROCESS SUSTAINABILITY FUNDAMENTAL PORTFOLIO ANALYSIS ANALYSIS CONSTRUCTION 21 Marketing document
Slide 22: Sustainability at the Heart of the Model
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING SUSTAINABILITY AT THE HEART OF THE MODEL The first stage will rank emerging and (frontier) countries based on objective criteria, from timely and objective data, by independent bodies such as the WHO, World Bank, UN De
Slide 23: Investment Process
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - ESG at the heart of the investment process - INVESTMENT PROCESS RISK SUSTAINABILITY FUNDAMENTAL ANALYSIS ANALYSIS SUSTAINABLE SCREENING ELIGIBLE PORTFOLIO ESG INVESTMENT UNIVERSE CONSTRUCTION 23 Marketing document
Slide 24: EM Sustainability Pillars
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - A Balanced Scorecard, Review driven Ranking based on +50 Key Criteria - EM SUSTAINABILITY PILLARS The country model which originally consisted of 5 pillars, has been brought back to 4 pillars, the ‘Economics’ pillar
Slide 25: EM Sustainability Ranking
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - An investable universe based on Sustainability - EM SUSTAINABILITY RANKING Source: DPAM, July 2022 Constituent countries and overseas territories are Q4 – Countries with insufficient data receive a score of -99 and a
Slide 26: Fixed Income Sustainable Advisory Board
- Steering our country models - WHY? STRATEGY PORTFOLIO OUTLOOK & APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING FIXED INCOME SUSTAINABLE ADVISORY BOARD THE ROLE OF THE FISAB 7-MEMBERS ADVISORY BOARD DEDICATED TO COUNTRY SUSTAINABILITY To select the sustainable criteria which fulfil the preliminary
Slide 27: Fundamental Analysis
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING Fundamental analysis of the economic, political, interest rate and financial health outlook coupled with a comprehensive risk assessment. Equally key will be market liquidity and general risk appetite. The result is an
Slide 28: Fundamental Analysis
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - Top-down and bottom-up coupled with a comprehensive risk analysis - FUNDAMENTAL ANALYSIS RISK GLOBAL RISK BOTTOM-UP APPETITE ANALYSIS SUSTAINABLE SCREENING PORTFOLIO ESG 28 Marketing document
Slide 29: Political Stability
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - Conviction portfolio based on in-debt macro- and political risk analysis - FUNDAMENTAL ANALYSIS BUY LIQUIDITY LONG TERM BUY REDUCE POLITICAL STABILITY DEAR VALUATION CHEAP BUY LIQUIDITY AVOID / SELL REDUCE DEAR VALUA
Slide 30: Fundamental Analysis
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - Conviction Portfolio based on bottom-up macro- and political risk analysis - FUNDAMENTAL ANALYSIS Source: DPAM 30 Marketing document
Slide 31: Country Analysis
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - Bottom-Up Approach - COUNTRY ANALYSIS Fiscal monitor External monitor Vulnerability map Gross sov Ext int. Net sov. FX GG balance GG primary GG debt/GDP GG debt Int exp/Rev Score External Basic Balance Country Fiscal
Slide 32: FX Vol Adj Yield Score
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - Cheap / Dear Analysis - VALUATION PROCESS FX VOL ADJ YIELD SCORE RATING Source: Bloomberg, DPAM, April 2022 32 Marketing document
Slide 33: Portfolio Construction
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING Aim to build a well-diversified portfolio with sustainability considerations (min 40% of AUM in countries of the top quartile, max 10% invested in the last quartile), concentration risks and the unconstrained investmen
Slide 34: Fixed Income Expertise
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - It’s a Team Effort- FIXED INCOME EXPERTISE RATES CREDIT MULTI-STRATEGY Euro government Euro Investment Grade Unconstrained Investment Grade Global government High Yield & Emerging Corporate Unconstrained
Slide 35: Fixed Income Fund Managers
FIXED INCOME Sam Vereecke, PhD, CFA CIO Fixed Income, 24 FUND MANAGERS Member of the Management Board ‘09 17 06 24 11 34 16 06 ‘07 ‘16 ‘09 ‘22 ‘18 ‘19 ‘22 GOVERNMENT BONDS Ronald Van Steenweghen Lowie Debou, CFA Sam Vereecke, PhD, CFA André Figueira de Sousa Michaël Vander Elst Hugo Verdière, CFA Ca
Slide 36: Global Themes
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - Top-Down Approach - GLOBAL THEMES Inflation Outlook Global Real Rates DM Curves DM Monetary Policy QE US Treasury Cash Balance Source: IMF, Worldbank, Datastream, Bloomberg, DPAM 36 Marketing document
Slide 37: Emerging Markets Themes
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - Top-Down Approach - EMERGING MARKETS THEMES World Trade and Business Confidence Growth and Inflation Outlook Spreads EM versus DM Commodities Exports to China Real Effective Exchange Rates 25% 20% 15% 10% 5% 0% Brazi
Slide 38: Key Investment Guidelines
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - Sustainability and Risk Guidelines - KEY INVESTMENT GUIDELINES Exclusion of countries defined as ‘Not Free’ by the Freedom House Democracy Confirmed ‘Authoritarian’ by the EIU SUSTAINABLE Minimum 40% in the top
Slide 39: FX Strategy
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - DPAM L Bonds Emerging Markets Sustainable - FX STRATEGY The Fund aims to be fully invested in local currency bonds, “carrying” the full FX risk. Decomposition of EMD Total Return shows that the carry on the bonds lar
Slide 40: Risk Monitoring
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - From conviction to portfolio - RISK MONITORING RISK MATRIX BOTTOM-UP PRE-TRADE PORTFOLIO Country weights POST TRADE ANALYSIS MANAGEMENT Currency weights Regional distribution Quartile distribution Rating di
Slide 41: Risk Monitoring
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - Risk Management at all levels - RISK MONITORING Ad-hoc 4TH LEVEL control AUDIT Independent control 3RD LEVEL RISK, LEGAL & COMPLIANCE 2ND LEVEL Permanent PORTFOLIO & ORDER MANAGEMENT SYSTEMS control OPERATIONS Perman
Slide 42: Risk and Reward Profile
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING RISK AND REWARD PROFILE SRRI calculated according UCITS (EU) regulation N°583/2010 RISK An overview and description of the risks are available on the next page. & PRODUCT CHARACTERISTICS REWARD PROFILE ISIN CODE (F) LU
Slide 43: Potential Risks
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING Credit risk Risk that a bond will lose all its value if the issuer of the bond is unable to repay its debt on the due date POTENTIAL Liquidity risk Some financial securities may be impossible to sell quickly at a given
Slide 44: Michaël Vander Elst
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING MICHAËL VANDER ELST Fund Manager Emerging Markets Bonds 34 Years of of experience Experience 2017 DPAM: Fund Manager Emerging Markets Bonds 2015 AXA BANK EUROPE: Investment Portfolio Management & ALM (IRRBB) expert 200
Slide 45: Hugo Verdière, CFA
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING HUGO VERDIÈRE, CFA Fund Manager Emerging Markets Bonds 16 Years of of experience Experience 2019 DPAM: Fund Manager Emerging Markets Bonds 2015 Candriam : Senior Fund Manager, Credit and Global Bonds 2011 EDF Investmen
Slide 46: Caleb Coppersmith
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING CALEB COPPERSMITH Sovereign Analyst Emerging Markets 55Years Yearsofofexperience Experience 2022 DPAM: Emerging Market Debt – Sovereign Analyst 2019 Moody’s Investors Service (Singapore): Sovereign Risk Group – Analyst
Slide 47: Jean Charles Sohouenou
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING JEAN CHARLES SOHOUENOU Fixed Income Data Analyst 5 Years Yearsofofexperience Experience experience 2020 DPAM: Fixed Income Data Analyst 2019 CNP ASSURANCES: Fund Analyst 2017 ROTSCHILD & CO: Risk Analyst Education Pari
Slide 48: Céline Boulenger
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING CÉLINE BOULENGER Macroeconomist 5 Years Yearsofofexperience Experience experience 2019 Bank Degroof Petercam: Macroeconomist, specialised focus on EM 2017 Georgia State University: Lecturer in Economics and Environment
Slide 49: Ophélie Mortier
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING OPHÉLIE MORTIER Responsible Investment Strategist 20 Years Yearsof ofexperience of Experience experience 2016 DPAM: Responsible Investment Strategist 2012 PIAM: Responsible Investment Coordinator 2009 PIAM: Fixed Incom
Slide 50: Portfolio Characteristics
PORTFOLIO CHARACTERISTICS Portfolio overview Regional breakdown Country breakdown Performance contribution YTD Peers analysis and drawdown 50 Marketing document
Slide 51: Portfolio Overview
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - Main characteristics - PORTFOLIO OVERVIEW Source: DPAM, December 30th , 2022 51 Marketing document
Slide 52: Portfolio Overview: Regional Breakdown per Currency
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - Regional breakdown per currency - PORTFOLIO OVERVIEW Source: DPAM, December 30th , 2022 52 Marketing document
Slide 53: Portfolio Overview: FX Exposure by Currency
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - FX exposure by currency - PORTFOLIO OVERVIEW Source: DPAM, December 30th , 2022 53 Marketing document
Slide 54: Country Breakdown
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - Exposure per country - COUNTRY BREAKDOWN DPAM L Bonds Emerging Markets Sustainable Positions by Country Rank Country LC LC Cash EUR USD Bond Total FX TOTAL 1 Mexico 9.72 0.01 0.00 0.00 9.72 0.40 10.12 2 South Africa
Slide 55: Country Weights
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - DPAM L Bonds Emerging Markets Sustainable - COUNTRY WEIGHTS >7% 4-7% 1-4% <1% Source: DPAM, December 30th , 2022 55 Marketing document
Slide 56: Performance Contribution YTD
STRATEGY PORTFOLIO OUTLOOK & Past performance does not predict WHY? HIGHLIGHTS CHARACTERISTICS POSITIONING APPENDIX future returns - EMFX offsetting local rates - PERFORMANCE CONTRIBUTION YTD Source: DPAM, December 30th , 2022 56 Marketing document
Slide 57: Risk/Return Since Inception
STRATEGY PORTFOLIO OUTLOOK & Past performance does not predict WHY? HIGHLIGHTS CHARACTERISTICS POSITIONING APPENDIX future returns - Double alpha at work - RISK/RETURN SINCE INCEPTION* *Actual inception 18/03/2013 Source: Morningstar Direct 57 Marketing document
Slide 58: Fund Performance YTD
STRATEGY PORTFOLIO OUTLOOK & Past performance does not predict WHY? HIGHLIGHTS CHARACTERISTICS POSITIONING APPENDIX future returns - Absence of Russia has been a mayor driver of relative performance - FUND PERFORMANCE YTD Source: DPAM, December 30th , 2022 58 Marketing document
Slide 59: Outlook
OUTLOOK “The scenarios presented are an estimate of future performance based on evidence from the past on how the value of this investment varies, and/or current market conditions and are not an exact indicator. What you will get will vary depending on how the market performs and how long you keep t
Slide 60: Outlook: The (Un)Surprising Resilience
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - Opportunities for investors - OUTLOOK: THE (UN) SURPRISING RESILIENCE IS INFLATION EMERGING MARKETS PEAKING? CENTRAL BANKS ACTION CARRIED AWAY BY VALUE THE CARRY? LIMITED DRAWDOWN DIVERSIFICATION IS KEY – DEFAULT RIS
Slide 61: Inflation Peaking?
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - A peak in inflation would be bullish for local debt - INFLATION PEAKING? Inflation surprises Monthly regional CPI changes 30.00 90% 2.000 25.00 80% 1.500 20.00 70% 1.000 15.00 60% 10.00 0.500 50% 5.00 0.000 40% 0.00
Slide 62: Real Rate Buffer
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - EM Central Banks have reacted much quicker … - REAL RATE BUFFER 4.00 1.93 3.00 2.00 1.00 0.00 -1.00 -2.00 -3.00 -4.00 -5.00 -6.00 Spread GBI EM Weighted Real Benchmark Rate DM Non-Weighted Real Benchmark rate -7.00 S
Slide 63: Regional Real Rates
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - … but regional differences are significant - REGIONAL REAL RATES 4 2 0 -2 -4 -6 -8 -10 2019 2020 2021 2022 2019 2020 2021 2022 CEE LATAM APAC SSA CEE LATAM APAC SSA Source: Bloomberg, DPAM, September 27th, 2022 63 Ma
Slide 64: Desynchronized Hiking Cycle
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - Some EM Central Banks are near the end while some just started to hike - DESYNCHRONIZED HIKING CYCLE Source: Bloomberg, DPAM, Central Bank reports, December 15th , 2022 64 Marketing document
Slide 65: The Hiking Paradox
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - How effective are rate hikes? - THE HIKING PARADOX 16.0 14.0 Rate hikes have no effect on 12.0 inflation due to supply 10.0 shortages or uncertainties 8.0 caused by war 6.0 Long lags, effective only after 4.0 sof
Slide 66: Real Yields
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - 10-year real yields based on 12M ahead inflation expectations - REAL YIELDS 8.00 6.00 4.00 2.00 0.00 -2.00 % -4.00 -6.00 -8.00 -10.00 -12.00 Source: Bloomberg, DPAM, September 27th, 2022 66 Marketing document
Slide 67: Low Positioning
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - Low positioning implies little selling pressure - LOW POSITIONING Foreign holdings (% local debt outstanding) Foreign holdings per country (% local debt outstanding) 50% 100% 45% 90% 40% 80% 35% 70% 30% 60% 25% 50% 2
Slide 68: Limited Drawdown
STRATEGY PORTFOLIO OUTLOOK & Past performance does not predict WHY? HIGHLIGHTS CHARACTERISTICS POSITIONING APPENDIX future returns - Positive years tend to be ‘very’ positive, negative years not - LIMITED DRAWDOWN Source: DPAM, December 30th , 2022 68 Marketing document
Slide 69: Mind Insufficient Diversification
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - Traditional indices are not diversified enough - MIND INSUFFICIENT DIVERSIFICATION A B DPAM L EMD SUSTAINABLE # countries 20 18 Typically 30/35 TOP 5 50.7% 49.9% 42.5% TOP 10 85.7% 81.6% 68.7% APAC 40.4% 55.5% 33.9%
Slide 70: Appendix
APPENDIX 70 Marketing document
Slide 71: Emerging markets double digit returns after peak in FED Funds
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING Emerging markets realize double digit returns the year(s) following a peak in FED Funds 71 Marketing document
Slide 72: Political Agenda
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING - Risks comes from Local Politics through a barrage of elections in high-profile EM Countries - POLITICAL AGENDA COUNTRY ELECTION DATE Tunisea Legislative 01-Jan-23 Czech republic Presidential 25-Feb-23 Nigeria General
Slide 73: Hard Currency Exposure
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING HARD CURRENCY EXPOSURE 73 Marketing document
Slide 74: Share Class Details
STRATEGY PORTFOLIO OUTLOOK & WHY? APPENDIX HIGHLIGHTS CHARACTERISTICS POSITIONING DPAM L BONDS EMERGING MARKETS SUSTAINABLE SHARE CLASS DETAILS Countries registered for sale Distribution ISIN Share class Currency Client Type Status BE LU NL FR CH DE AT IT ES UK FI SE SG type LU0907927171 A EUR Dist
Slide 75: Head and Local Offices
HEAD OFFICE Belgium LOCAL OFFICES Wiesenhüttenplatz 25, Corso Europa 15, 60329 Frankfurt am Main 20122 Milano dpamfunds.com degroofpetercam.com DE IT +49 69 56 60 82 531 +39 02 12412 4673 Paseo de la Castellana 141, Rue Eugène Ruppert 14, Rue Guimard 18, Planta 19, L - 2453 Luxembourg +32 2 287 91 1
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