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GAM Local Emerging Bond

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GAM Local Emerging Bond is a directional, high-conviction strategy focused on sovereign local emerging market bonds and currencies, managed by Paul McNamara and the Emerging Markets Debt team, one of the most highly-acclaimed and established teams in the industry. Their track record of delivering excess returns across a variety of cycles is a result of macro-based pronounced single country allocations, rather than top-down market timing bets.

Our Edge

Unrivalled track record

With over 18 years under current leadership, the fund provides investors with the longest-standing, most consistently 1st quartile-ranked and top-rated approach within the sector.

High conviction, active approach

Alpha generation is driven by considerable divergences between countries and pronounced single country allocations, rather than aggregate market timing positioning.

Macro-driven, value-based

The team actively allocates to 15-20 emerging and frontier markets, focusing on approximately 10 very liquid core markets.


Strong emphasis is placed on running a liquid, diversified portfolio, typically comprised of 100-150 sovereign local emerging market bonds and currency forwards.

Investment Team

The exceptionally stable Emerging Markets Debt team is led by Paul McNamara, who has managed the fund since launch in 2000. The multi-award winning strategy has evolved into the largest local EMD UCITS fund and the team ranks amongst the largest managers of local EMD solutions globally.

The team’s extensive background of navigating economic cycles of crisis and recovery in EMD forms the foundation of their process, while a collaborative working style means that each person contributes to both research and portfolio management.

The team actively leverages off the extensive investment insights and capabilities of GAM’s broader global fixed income teams.

We seek to add value by disagreeing with the market and being right
Paul McNamara, Investment Director.

Philosophy and Process

Investment Philosophy

The team’s thematic, macro-driven approach is founded on the conviction that developed economies drive emerging markets fundamentals, valuations and market technicals, and that these global themes should drive country selection and portfolio construction. At a bottom-up level, the team believes that most alpha potential can be unlocked by gearing qualitative and quantitative country research towards identifying and quantifying idiosyncrasies and turning points in economic cycles. Resulting investment views and positioning can materially deviate from market consensus and index compositions.

Investment Process

Unlike most investment processes in the industry, the team starts not by analysing emerging markets, but by establishing 3-5 “Big 3”(US,Europe and China) top-down global themes to determine country selection and specific return and risk driver preferences. Extensive bottom-up country research combined with a proprietary ‘crisis filter’ tests these views and seeks to identify potential country inflection points, which are further refined by considering valuation, technical and country specifics. This typically results in active exposure towards 15-25 emerging and frontier markets centred upon approximately 10 very liquid core markets. The diversified portfolio typically comprises 100- 150 bonds and FX forwards. Active risk management is key to decision making, with independent oversight by GAM’s risk teams.


Theme generation

  • Establish baseline scenarios for US, Europe and China
  • Develop 3-5 top down investment themes

Country analysis

  • ‘Crisis filter’ tests views and flags potential country cycle inflection points
  • Bottom-up research sharpens single country views

Portfolio construction

  • Themes drive country selection and overall portfolio architecture
  • High conviction portfolio of ~100-150 single positions (Rates or FX or Rates & FX)

Risk management

  • Active risk management at portfolio, macro, theme and single position level
  • Clear focus on sovereign/ quasi-sovereign bonds and FX forwards

Reasons to Invest

High income

We believe absolute and excess yield levels remain elevated, both within a historical and the current cyclical context, while inflationary pressures remain contained.

Cheap valuations

In our view, the asset class is oversold and under-owned, both from a fundamental, valuation and market technical perspective, offering compelling entry levels to investors.

External re-balancing

EM trade and current account balances are back in positive territory, empirically a strong cyclical support to asset class returns.

Growth rebound

The EM growth cycle ex-China has turned; the growth differential to developed economies is set to widen and EM assets should outperform.

Key Risks

Credit Risk / Debt Securities

A rise or fall in interest rates causes fluctuations in the value of fixed income securities, which may result in a decline or an increase in the value of such investments.

Interest Rate Risk

A rise or fall in interest rates causes fluctuations in the value of fixed income securities, which may result in a decline or an increase in the value of such investments.

Currency Risk

The value of investments in assets that are denominated in currencies other than the base currency will be affected by changes in the relevant exchange rates which may cause a decline.

Market Risk / Emerging Markets

Emerging markets will generally be subject to greater political, market, counterparty and operational risks.

Capital at risk

All financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed.

Active Thinking Video

In his latest video update, Paul McNamara discusses how factors in major developed markets have had a major influence on emerging market (EM) debt, how EM fundamentals differ from their developed peers and offers his outlook for the asset class.

I think a big reason for the selloff in bonds in the core markets is this idea that we've got a huge amount of debt and huge deficits going forward. Generally, balance sheets in emerging markets are in better shape. I think there's some scope for outperformance on the back of that.


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GAM Multibond - Local Emerging Bond is a sub-fund of Gam Multibond, registered office at 25, Grand-Rue, L-1661 Luxembourg, an umbrella investment company

Disclaimer: Past performance is not an indicator of future performance and current or future trends. The indications could be based on figures denominated in a currency that may be different from the currency of your residence country and therefore the return may increase or decrease as a result of currency fluctuations. Capital at risk: all financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed. Any reference to a security is not a recommendation to buy or sell that security.