60: MFS's Ward Brown - Emerging Market Debt, the IMF and Geopolitics

Ward Brown is a fixed income portfolio manager for MFS Investment Management and runs an emerging market debt strategy. Brown started focusing on emerging markets, while he worked at the International Monetary Fund. We talked about his time at the IMF, geopolitical tensions and the global pandemic. Enjoy the show! Overview of podcast with Ward Brown, Fixed Income Portfolio Manager, MFS 2:00 Studying economics and looking at how credit conditions affect business cycles 3:00 Working for the IMF 4:30 "I really learned applied economics at the IMF and part of applied economics is thinking about the political implications" 6:30 Providing help and advice to emerging markets is the most applied form of economics. 7:00 "Quantitative easing seems to have been around for a long time, but it is really new territory" 9:30 Is an investment in EM debt just a currency play? 9:45 "The long run benefits come from the often higher carry that is offered in emerging market debt." 11:00 Hard, local, combined or blended approaches to currency in EM debt 14:00 Chinese bonds will enter the FTSE World Government Bond Index. Will this cause issues? 15:20 "The Chinese bond market is mainly institutional and mainly local investors" 17:00 How do geopolitical trends influence your investment decisions? 17:30 "You have to be careful where to take risk in China" 19:30 On EM corporate bonds 20:30 "Some of the interesting opportunities that we are looking at is ones that have suffered from the pandemic" 21:30 Political intervention, gaming in China 22:00 "Do companies have the balance sheet strength to get through perhaps not the best exit of the pandemic?" 23:08 "When investing in emerging markets, expect the unexpected" 24:00 "The market has priced in quite a bit of (rate) hikes" 25:00 On duration. "Right now, it is the 5-year part of the curve" 27:30 How does the current pandemic stack up against other periods of fluctuation, such as the Asian Financial Crisis?