3 / 5 Stars
4 3 1 5 2
Zacks Investment Research
Standard & Poor's
4 / 5 Stars
#8 in Emerging Markets Bond
U.S. News evaluated 94 Emerging Markets Bond Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.
The fund has returned -8.19 percent over the past year, 5.36 percent over the past three years, 11.19 percent over the past five years, and 8.03 percent over the past decade.
|Trailing Returns||Updated 01.31.2014|
|Year to date||-1.1%|
|3 Years (Annualized)||5.4%|
|5 Years (Annualized)||11.2%|
|10 Years (Annualized)||8.0%|
Fund manager Kristin Ceva has a fairly broad outlook when it comes to emerging markets and will go pretty much anywhere in that realm to find opportunity. Management ratchets down the risk associated with this more volatile asset class by focusing mainly on government-backed foreign bonds.
As of February 05, 2014, the fund has assets totaling almost $815.12 million invested in 201 different holdings. Its portfolio primarily consists of government-backed bonds, with a smaller portion of corporate bonds, in emerging markets countries.
Amid the market meltdown in 2008, the fund was positioned relatively defensively, Ceva says. As a result, the fund lost much less than its peers and rebounded in 2009 with a strong return as the markets recovered. Since then, Ceva has increased the fund’s corporate bond investments and added exposure to local currencies in countries such as Brazil, Ghana, and Indonesia. Lately, the fund has been overweight in Brazil and Mexico because of the improving credit situation in those countries, she says. The fund has returned -8.19 percent over the past year and 5.36 percent over the past three years.
The fund has generally outperformed its peers over the long term, and its three-year trailing returns place it in the top 13 percent of the emerging markets bonds category. The fund has returned 11.19 percent over the past five years and 8.03 percent over the past decade.
Ceva uses a top-down process, starting with a macroeconomic outlook and continuing with granular research on each emerging market. “We’re trying to understand what the macro trends are, the fiscal balance, the debt-to-GDP trends,” Ceva says. She also considers the local political atmosphere, electoral policy, and other more qualitative factors when determining where to invest. “In general, we try to avoid countries where there hasn’t been willingness to pay or where the social factors are too unpredictable,” Ceva says. In wake of the debt crisis in Greece, Ceva says management has made an extra effort to identify and avoid countries with financial instability or social unrest.
Kristin Ceva has managed the fund since its 1998 inception. She directs the global fixed-income group at Payden & Rygel, and oversees their global sovereign debt strategies. Cristina Panait and Arthur Hovesepian
Payden Emerging Markets Bond Fund has an expense ratio of 0.76 percent.
Emerging markets are known to be somewhat volatile.