Standish Mellon, Boston Co. launch bonds, stock, currency EM strategy

By Toni Weeks

San Diego, Feb. 17 - Standish Mellon Asset Management Co. LLC and Boston Co. Asset Management, LLC, both investment arms of BNY Mellon Asset Management, announced in a press release that they have launched a new jointly managed Total Emerging Markets strategy, which actively seeks to create a diversified portfolio of attractive emerging markets bonds, equities and currencies.

According to the release, Standish and Boston will share asset allocation and country selection decisions. Standish will select fixed-income securities and make currency management decisions, while Boston handles equity selections.

"The strategy is truly integrated since both firms will jointly assess investment opportunities in each emerging markets country by asset class, as opposed to simply deciding on the overall asset allocation split for the entire portfolio and then managing the equity and fixed-income sleeves separately," Sean Fitzgibbon, team leader for emerging markets core equities at Boston, said in the press release.

In contrast to a traditional emerging markets equities-only portfolio, the new strategy is designed to encompass an expanded investment universe, benefitting from a greater degree of country diversification than an equities-only portfolio.

"We have designed the Total Emerging Markets strategy so it can seek better risk-adjusted and absolute long-term performance than traditional emerging markets equity portfolios benchmarked against the MSCI Emerging Markets index," Alexander Kozhemiakin, head of the emerging markets fixed-income team at Standish, said in the release.

"We believe this is a critical advantage because country risk is one of the dominant risk factors in emerging markets," he added.

The Total Emerging Markets strategy utilizes an integrated platform for controlling risk that is distinct from the more common fund-of-funds approach, the release said.

"We believe that this strategy is well positioned to take advantage of higher growth rates, improving macroeconomic fundamentals, favorable demographic trends and competitive cost structures in the emerging markets, when compared against those in the developed world," Kozhemiakin said.

"The strategy should be appealing to investors who are contemplating an increase in exposure to emerging markets but are concerned about the high volatility and concentration of traditional emerging markets equity products," he continued.

Based in Boston, Standish Mellon Asset Management and The Boston Company Asset Management provide investment management services.

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