Aperture Emerging Debt Opportunities - Q1 2024 Manager Commentary
In Short
Peter Marber,
CIO Emerging Markets and Portfolio Manager
Peter Marber is the Portfolio Manager of the Aperture New World Opportunities strategy. For over 30 years, Peter has professionally invested billions of dollars for many of the world’s largest companies at firms including Loomis, Sayles & Company, HSBC, and Wasserstein & Co. Peter is based in Aperture’s New York office. Peter earned his B.A. at Johns Hopkins, his M.I.A. from Columbia, and his Ph.D from The University of Cambridge.
Aperture Emerging Debt Opportunities: Commentary for Q1 2024
Emerging Markets Bonds 1Q 2024: Onward and Upward
After two difficult years in fixed income, 2024 launched with positive momentum for Emerging Markets credit – surprising given the macro backdrop of higher US interest rates for longer than expected, along with a lethargic Chinese economy that seems stuck in the mud.
Since July 2023, the US federal-funds rate range (5.25% - 5.50%) has been far above typical levels seen in the last 15 years and higher than many pundits had predicted last fall. Indeed, as of early April, the odds of a June rate cut fell below 50% - much less than expected in late 4Q of 2023. One Fed governor, Neil Kashkari, has even floated the idea that there may not even be cuts by year end.
Strong US GDP, employment trends, and resilient stock markets have created interesting feedback loops providing a strong bid to risk assets - a bid that one would not have predicted given stubbornly high US interest rates. US stocks, in particular, have seemed immune to rate gyrations. The S&P 500 staged impressive 10+% gains in 1Q, taking total trailing 12-month returns to a remarkable 30%. Momentum was led by the tech sector, especially companies tied to the Artificial Intelligence (AI) boom. Value stocks also joined in the rally.
