Local Currency

Actively managed, research driven strategy targeting excess return over the JPM GBI EM Global Diversified Index. Strategy invests in local currency sovereigns and FX with opportunistic allocations to hard currency corporates, sovereigns, and quasi-sovereigns. Strategy seeks to generate 45% of its excess return from FX, 30% from country selection, and 25% from security selection.

Objective and Approach

Began managing Local Currency Strategy in 2010
Maximise alpha opportunity set from diversified sources

Top-down country selection
Bottom-up security selection
Local currency sovereigns
FX
Opportunistic allocations to EM hard currency corporates, sovereigns, and quasi-sovereigns

Why PGIM Fixed Income?

Diversified Sources of Alpha

Seeks to extract alpha from numerous sources
Greater number of countries can mean more diversification and a prudent way to seek alpha

A Stable-Management Team with Extensive Experience and Tenure

Our senior team has been managing the strategy since its inception
Investing in emerging markets for [an error occurred while processing this directive] years, with nearly a decade of investing in local markets
Transparent, repeatable process time-tested across asset classes

A Deep Culture of Risk Management, Quantitative Research, and Bottom Up Credit Research

Proprietary risk analytics integrating hard currency, local currency, and FX positions
Independent risk management/quantitative research team of [an error occurred while processing this directive]
An extensive credit research team of [an error occurred while processing this directive] analysts providing bottom up analysis

As of [an error occurred while processing this directive]. ¹Employee of a wholly-owned subsidiary of PGIM, Inc., PGIM (Singapore) Pte. Ltd., located in Singapore.

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US and Singapore-based senior investment team averages [an error occurred while processing this directive] years experience¹
$[an error occurred while processing this directive] billion in emerging markets debt strategy assets

FOR INSTITUTIONAL / WHOLESALE OR PROFESSIONAL CLIENT USE ONLY - NOT FOR RETAIL DISTRIBUTION

Past performance is not a guarantee or a reliable indicator of future results. Any discussion of risk management is intended to describe PGIM Fixed Income's efforts to monitor and manage risk but does not imply low risk. All investing involves risk, including the risk of loss. Fixed income securities are subject to certain risks, including credit, interest rate, issuer, market and inflation risk. Foreign and emerging market securities are subject to currency, political, economic, and market risks, which may be enhanced in emerging market countries. High yield securities are lower rated securities that may have a higher degree of credit and liquidity risk. Mortgage and asset-backed securities are sensitive to early prepayment risk, a higher risk of default and may be hard to value and difficult to sell. U.S. Government securities may not be backed by the full faith and credit of the U.S., thus, these issuers may not be able to meet their future payment obligations. With sovereign debt securities, the issuer or governmental authority that controls the repayment of the debt may not be willing or able to repay the principal and/or pay the interest when it becomes due, in accordance with the terms of such obligations. Collateralised mortgage obligations may have unpredictable cash flows that can increase the risk of loss. Public bank loans are subject to liquidity risk and the credit risks of lower rated securities. The use of derivative instruments may disproportionately increase losses and have a significant impact on performance. They also may be subject to counterparty, liquidity, valuation, correlation and market risks.

There is no guarantee that any investment strategy will achieve its objective under all market conditions or be suitable for all investors. Each investor should evaluate their ability to invest for the long-term, especially during periods of downturn in the market.

The views and opinions expressed herein are those of PGIM Fixed Income and are subject to change without notice. This material has been provided for informational purposes only and should not be construed as investment advice or as a recommendation to buy or sell any security or participate in any strategy.