Forward Management has relaunched the Forward International Fixed Income Fund as the Forward EM Corporate Debt Fund. SW Asset Management, an asset management firm that specializes in emerging corporate debt, will sub-advise the fund. David Hinman, chief investment officer of SW Asset Management, will serve as co-portfolio manager of the fund.
Emerging market debt securities have been outperforming emerging market equities but exhibiting lower volatility for nearly the past decade, said J. Alan Reid, chief executive officer of Forward Management. “The inefficiencies in the emerging market corporate debt market, coupled with its strong return potential, make it an obvious choice for investment advisers,” Reid said.
Hinman added: “It’s a well-kept secret that emerging market corporate debt offers one of the best yields in the market relative to credit rating and bond maturity. There is also plenty of activity, since sovereign debt spreads have compressed and issuance is down, making it easier for mid-level corporate issuers to fund and capitalize their growth.”
Forward noted other advantages of emerging market corporate debt, including shorter average durations than other corporate bonds, a sizeable number of private owned companies in the credit universe, a relatively uncrowded market, owner guarantees, the issuance of many bonds under U.S. or English law, strong fundamentals and the forecast for rapid economic growth