Latest news with #EmergingMarkets
Yahoo
2 days ago
- Business
- Yahoo
Pioneering Impact Strategy, Record EM Sustainable Finance (EMSF), Celebrates Its Fourth Anniversary With Strong Outperformance Since Inception
LONDON, July 01, 2025--(BUSINESS WIRE)--Record Currency Management, in partnership with UBS Wealth Management, is proud to celebrate the fourth anniversary of its pioneering Emerging Market Sustainable Finance (EMSF) Strategy. Operating at the intersection of impact investing, Emerging and Frontier Market currencies and private placements, the strategy offers investors an opportunity to achieve financial returns, alongside measurable impact. Since inception, EMSF has grown to over U$1 billion in AUM and delivered positive returns of +18.7% since inception. The strategy has significantly outperformed both USD and local currency EM Debt benchmarks with around 30% lower volatility - reaffirming that investors need not compromise between financial returns and measurable impact. By taking currency risk across a wide universe of emerging and frontier currencies, EMSF helps MDBs and DFIs raise local currency funding. This allows borrowers in Emerging Markets to receive funding in local currency, eliminating FX risk. Simultaneously, the strategy directly supports the financing of development projects through its investments in bond instruments issued by MDBs and DFIs with active operations in Emerging Markets. "The need for capital in Emerging and Developing Economies continues to grow as we approach the 2030 deadline for achieving the UN Sustainable Development Goals. It is now estimated by the UN that an additional US$5-7 trillion of annual private sector funding is required to meet the SDGs by 2030. Innovative sustainable finance solutions, such as EMSF, have a vital role to play in bringing private investors into the development finance marketplace. We are proud to have delivered tangible impact and strong outperformance relative to Emerging Market Debt benchmarks, demonstrating that you don't need to sacrifice returns to do good. We remain committed to helping MDBs and DFIs with their local currency operations in Emerging and Frontier Markets." – Andreas Koester, Head of EM and Frontier Investments. About Record Founded in 1983, Record is a specialist currency and asset manager offering best-in-class bespoke products to large global investors. The Group manages over US$100bn AUM for 140 institutional clients worldwide across FX Risk Management, Absolute Return and Private Markets. View source version on Contacts For further information please contact:Andreas Koester, CEO, EM and Frontier InvestmentsTel: +44 (0) 1753 852 222ClientTeam@
Business Wire
2 days ago
- Business
- Business Wire
Pioneering Impact Strategy, Record EM Sustainable Finance (EMSF), Celebrates Its Fourth Anniversary With Strong Outperformance Since Inception
LONDON--(BUSINESS WIRE)--Record Currency Management, in partnership with UBS Wealth Management, is proud to celebrate the fourth anniversary of its pioneering Emerging Market Sustainable Finance (EMSF) Strategy. Operating at the intersection of impact investing, Emerging and Frontier Market currencies and private placements, the strategy offers investors an opportunity to achieve financial returns, alongside measurable impact. Since inception, EMSF has grown to over U$1 billion in AUM and delivered positive returns of +18.7% since inception. The strategy has significantly outperformed both USD and local currency EM Debt benchmarks with around 30% lower volatility - reaffirming that investors need not compromise between financial returns and measurable impact. By taking currency risk across a wide universe of emerging and frontier currencies, EMSF helps MDBs and DFIs raise local currency funding. This allows borrowers in Emerging Markets to receive funding in local currency, eliminating FX risk. Simultaneously, the strategy directly supports the financing of development projects through its investments in bond instruments issued by MDBs and DFIs with active operations in Emerging Markets. 'The need for capital in Emerging and Developing Economies continues to grow as we approach the 2030 deadline for achieving the UN Sustainable Development Goals. It is now estimated by the UN that an additional US$5-7 trillion of annual private sector funding is required to meet the SDGs by 2030. Innovative sustainable finance solutions, such as EMSF, have a vital role to play in bringing private investors into the development finance marketplace. We are proud to have delivered tangible impact and strong outperformance relative to Emerging Market Debt benchmarks, demonstrating that you don't need to sacrifice returns to do good. We remain committed to helping MDBs and DFIs with their local currency operations in Emerging and Frontier Markets.' – Andreas Koester, Head of EM and Frontier Investments. About Record Founded in 1983, Record is a specialist currency and asset manager offering best-in-class bespoke products to large global investors. The Group manages over US$100bn AUM for 140 institutional clients worldwide across FX Risk Management, Absolute Return and Private Markets.
Yahoo
2 days ago
- Business
- Yahoo
What Traders Have Gotten Wrong in 2025
(Bloomberg) -- Six months since Wall Street laid out its predictions for 2025, world conflicts and President Donald Trump's turbulent policy making have shattered assumptions about the strength and preeminence of US assets and the economy — leaving market favorites in tatters and conjuring unexpected winners. Philadelphia Transit System Votes to Cut Service by 45%, Hike Fares Squeezed by Crowds, the Roads of Central Park Are Being Reimagined Sao Paulo Pushes Out Favela Residents, Drug Users to Revive Its City Center Sprawl Is Still Not the Answer Mapping the Architectural History of New York's Chinatown As foreseen: swings in sovereign bond markets have been sharp, the Japanese yen rallied, and a comeback for emerging markets is finally materializing. At the same time, few envisaged the dollar — the emblem of US exceptionalism — would suffer losses this deep, or predicted the S&P 500's giddying plunge followed by breakneck rebound. Europe's stock market, meanwhile, has morphed from backwater into investor must-have. A 'very significant evolution' has occurred in markets in the past six months, said Simon Dangoor, head of fixed income macro strategies at Goldman Sachs Asset Management. 'Any themes that you were playing for at the start of the year that were about medium-term trends have been tested.' Here's a look into a group of assets and how they performed so far this year: US dollar Trump's low-tax, high-tariff policies were expected to stoke inflation and reduce the chances of interest-rate cuts from the Federal Reserve — factors seen propelling the dollar's supremacy well into 2025. Instead, a Bloomberg gauge of the currency posted its worst start to a year since at least 2005, and its hegemony is being debated ever more fiercely. The 'Liberation Day' tariffs at the start of April were so sweeping and punitive that they fueled fears of a US recession and fanned speculation Trump was seeking to buoy domestic manufacturing by engineering a weaker dollar. That's a dangerous game: the US depends on foreign investors to buy its mountainous debt pile, and a weaker greenback erodes returns on those bonds. Societe Generale SA, Morgan Stanley and JPMorgan Chase & Co. hadn't expected a turn in the dollar's fortunes in the first half and only predicted gradual slippage later in the year. Now, a JPMorgan team led by Meera Chandan says the greenback's faltering link to rates and equities could be a sign of structural weaknesses. They predict a gauge of the US currency's strength will drop another 2% by year-end. US stocks Investors entered the year with a record high allocation to US stocks, emboldened by a robust economy and bets around artificial intelligence. That optimism was all but abandoned within months, first as Chinese startup DeepSeek challenged the US's dominance in the AI race, and later on fears that Trump's tariffs would tip the economy into a recession. Nearly $7 trillion of market capitalization was wiped from the technology-heavy Nasdaq 100 Index between a February peak and an April low. A Bank of America Corp. fund manager survey showed the biggest-ever drop in exposure to US stocks in March. By early April, US equity bulls were in short supply. But Trump's decision later that month to pause some of the highest tariffs in a century proved pivotal. The S&P 500 hit a record high as data show the economy chugging along and with technology heavyweights in vogue again. After months of ructions and tempered forecasts, Wall Street strategists are taking an optimistic tone on US stocks for the second half. 'I am as bullish on US stocks as ever,' said Marija Veitmane, a senior multi-asset strategist at State Street Global Markets. 'They still offer the best earnings story with the fastest growth and most predictability. Institutional investors restarted buying in mid-April and have not looked back since.' Asian currencies With the Bank of Japan prepared to raise interest rates at a time when peers were cutting, traders started 2025 confident they'd see a rally in the yen. JPMorgan Asset Management and Brandywine Global Investment Management were among those proved right by the currency's almost 9% surge against the dollar to around 145 this year. The yen got a further boost in April from surging demand for haven assets amid the confusion around Trump's tariffs. Jupiter Asset Management's Mark Nash, who positioned for the rally in January, forecasts the currency will climb to 120 per dollar by year-end, an advance of around 17% from current levels. Read More: Goldman's Chambers Sees Currency Hedges Accelerate Dollar's Fall Bond Traders Boost Bets US 10-Year Yield Will Dive Toward 4% JPMorgan U-Turns on Stock Market, Now Sees Slight Gain for 2025 Goldman and Citi See Europe's Economy Powering Stock Rally Morgan Stanley, Goldman See Resilient Economy Supporting Stocks In China, meanwhile, US trade tariffs were expected to hurt the yuan, but so far the dollar's own sharp selloff has upended the prediction. In December, Nomura called for the yuan to weaken to 7.6 per dollar in offshore trading by May, and JPMorgan saw a rate of 7.5 in the second quarter. Instead, the yuan has surged 1.8% this year, hitting 7.1565 per dollar on Thursday — the highest level in seven months — as the People's Bank of China strengthened the daily reference rate. Still, strategists say the yuan will eventually have to fall, given strains in the Chinese economy that may require monetary and fiscal easing in the second half of the year to lift growth. 'China will want to utilize the yuan as a release valve, as well as to maintain competitiveness given the ongoing pressure on the economy and the fact that exports remain the main engine of growth," Barclays Bank Plc strategists Mitul Kotecha and Lemon Zhang wrote in a June 24 note. They see the yuan weakening to 7.20 per dollar by the end of the year, and to 7.25 by March 2026. Global bonds Amid the turbulence, many investors were grateful for one trade that 'saved their bacon,' according to Jared Noering, global head of fixed income trading at NatWest Markets. Short-dated government bonds were expected to perform well, boosted by central bank interest-rate cuts as inflation eased further. In contrast, long-dated bonds were predicted to come under pressure as governments took on increasing levels of debt to plug deepening fiscal deficits and ramped up public spending. Wagers structured around this divergence have largely played out around the globe, including in the US where markets remain on edge over the administration's tax and spending plans. Measures of so-called term premium in longer-dated US Treasuries have soared in an indication buyers are demanding higher compensation for rampant borrowing. Pimco and Allspring Global Investments correctly predicted the divergence in short- and longer-term yields in global bond markets. BlackRock Investment Institute was also correct to underweight long-term Treasuries. European stocks It was hard to find fans of European equities at the start of the year, let alone investors betting they would outshine their US peers. Six months on, fears about a sluggish economy and the threat of tariffs have been offset by Germany's plans to unleash hundreds of billions of euros in defense spending after Trump demanded Europe foots its own military bill instead of relying on the martial heft of the US. As of June 27, the benchmark Stoxx 600 index had trounced the S&P 500 by 16 percentage points in dollar terms, the best relative performance since 2006. The euro has surged to $1.17, bucking widespread forecasts for parity with the dollar in early 2025. Beata Manthey, Citigroup Inc.'s head of European and global equity strategy, was among the rare voices to back European stocks late last year. Targets at JPMorgan and Goldman Sachs proved too cautious. Goldman's chief global equity strategist, Peter Oppenheimer, says much has changed: 'Very aggressive tariffs are not likely to be fully implemented.' Emerging-market comeback Every year since 2017, emerging-market equities lagged US stocks. In 2025, a procession of money managers — with Morgan Stanley among the most vocal — were convinced it was going to be different. And so far the jinx appears to have been broken. A boom in artificial intelligence companies from Taiwan, South Korea and China has helped the equity index. But the overall investment case for emerging markets is underpinned by broad currency strength against the greenback and the perception that the period of US exceptionalism is waning. Emerging markets have added $1.8 trillion to shareholder wealth in 2025, reaching record market capitalization of $29 trillion. Bernd Berg, a strategist at InTouch Capital Markets, expects those inflows to continue thanks to benign inflation and decent growth rates. 'The geopolitical tensions have not derailed this rally,' Berg said. In individual developing markets, Turkey's lira took a hit in March — tumbling to a record low in the space of half an hour — after President President Recep Tayyip Erdogan detained his main political rival. That spooked investors who'd borrowed funds in countries where interest rates were low and plowed the cash into high-yielding lira-denominated assets. They feared the political shock could eventually herald changes in the country's market-friendly economic policy and high central-bank interest rates. While the broader fears haven't materialized, investors are wary, with Pimco among those trimming exposure to Turkish bonds. Meanwhile, the failure of Trump's push for peace between Russia and Ukraine has seen the price of Ukrainian bonds slump. Once a favorite investor bet on a ceasefire, Ukrainian warrants, which have interest payments linked to economic growth, have tumbled since the government defaulted on a payment. --With assistance from Carter Johnson, Selcuk Gokoluk, Andras Gergely, Alice Atkins, Naomi Tajitsu, Michael Msika, Srinivasan Sivabalan and Kevin Simauchi. 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Bloomberg
3 days ago
- Business
- Bloomberg
India's Bond Index Moment Falters as Foreign Inflows Dry Up
India's breakthrough into global debt markets is in need of a second act. Foreign investors have bought a net $20 billion of the nation's index-eligible sovereign debt after JPMorgan Chase & Co. announced India's inclusion to its benchmark emerging market index in 2023. Recent outflows have left total investments on the low end of estimates by analysts.
Mail & Guardian
6 days ago
- Business
- Mail & Guardian
We need to upgrade to Development Finance 4.0 — business as usual won't get us there
The UN's Sustainable Development Goals. Development finance has long served as the quiet scaffolding behind the social and economic progress of emerging markets. Today, we stand at a pivotal moment. As the global development landscape evolves, so too must the models that guide our financial strategies and instruments in delivering the development mandate. By building on past gains and embracing new forms of collaboration, we can design a more aligned and impactful financial ecosystem for the future. To meet the scale and complexity of today's development challenges, we must give careful and consolidated thought to how we organise, deploy and measure capital earmarked for development projects. This is the impetus behind Development Finance 4.0, a model I've begun to articulate that foregrounds collaboration, contextual intelligence and impact as central pillars of sustainable finance. In my years working across academia, government and development institutions, I've seen how even well-intentioned finance can underperform when it operates in isolation. Too often, governments, private investors, multilateral agencies and civil society pursue development goals independently and apply distinct metrics, risk appetites and timelines. This result is duplication, missed opportunities and diluted impact. Development Finance 4.0 proposes a fundamental shift — from fragmentation to alignment. It urges us to replace parallel pipelines with shared frameworks that enable mutual accountability and maximise developmental returns. This is not a rhetorical shift. It is an operational one. At its core, this next iteration of development finance rests on four non-negotiables: equity, ethics, sustainability and collaboration. These are not lofty ideals. They are the minimum conditions for meaningful effect. Blended finance will continue to be a central tool. When well-structured, it enables public and philanthropic capital to de-risk investments and mobilise private finance toward development goals. Between 2012 and 2020, blended finance mobilised over $51 billion in private capital, according to the Organisation for Economic Co-operation and Development. Yet this figure remains modest in light of the $2.5 trillion annual financing gap for the sustainable development goals in developing countries. To strengthen these partnerships, the five anchoring principles of blended finance must be enhanced. These are the development rationale — begin with purpose. What development problems are we solving and why? Second, the mobilisation of commercial capital — does the partnership unlock private finance that would not otherwise materialise? Then comes local context and the question: are we designing solutions that reflect the institutional realities and lived experiences of the communities they serve? Effective partnership is vital too and whether roles are clearly defined and there is a mechanism to manage disputes, risk and accountability. Last, transparency and impact must be considered as well. Are we measuring what matters — and sharing those findings across stakeholders? Despite the growing chorus around impact investing, meaningful impact measurement remains the Achilles heel of development finance. The sector is rich in Without reliable, disaggregated data, we cannot answer some basic questions. What is the long-term value of improved access to education? How does a new health facility shift labour productivity over time? These ripple effects are critical for policymaking but often go undocumented. And this leaves gaps in learning and weakens trust between actors. Robust impact measurement goes beyond reporting. It is a shared learning process and a precondition for partnership. Governments, investors and communities need a common view of what success looks like, how we measure it and why it matters. In this model, impact or, more importantly, measured and communicated impact, becomes a currency of trust. If Development Finance 4.0 is to become more than a framework, education must play a catalytic role. The next generation of finance professionals must be equipped, not only with technical tools, but with a deep understanding of context, systems and ethical complexity. Students need to be challenged on their understanding of conventional financial instruments and assets, principles and their applicability to the ever-evolving development landscape. They must be able to grapple with contextual dynamics, systemic trade-offs and the ethical dimensions of development. They need to be equipped, not only as finance professionals, but as system builders and changemakers. That means going beyond case studies and spreadsheets to explore trade-offs, engage with community realities and interrogate the true meaning of development. Because, ultimately, finance as a catalyst for development, must reflect what we value, who we serve and how we define and achieve ethical, equitable, sustainable and collaborative development. Development finance is not charity, nor is it conventional capitalism. It is a form of purposeful capital deployment, designed to address systemic inequities and catalyse sustainable growth. But, to achieve this, we must move beyond legacy models built for a different era. The AU's Agenda 2063 and the UN's sustainable development goals set ambitious visions. Yet current fiscal trajectories and fragmented ecosystems place these targets out of reach. Africa alone faces a $1.6 trillion financing gap between now and 2030. Bridging this gap demands that all actors, be they public, private or philanthropic, come together, not as competitors, but as co-creators. The message is simple. The future of development finance will not be built alone. All hands must be on deck. Thus, financing sustainable development should be done with an ethical, equitable, sustainable and collaborative approach. Latif Alhassan is the professor of development finance and insurance, and programme director of the Master of Commerce in Development Finance,* at the UCT Graduate School of Business.
