Emerging Market Corporate Credit: Time to Shine?

A misunderstood asset class?

For decades, emerging market corporate credit has lived in the shadow of its developed market cousin. Often seen as the preserve of more speculative firms, it may surprise you to note that the average credit quality of the EM IG corporate market now exceeds that of the US (Figure 1). We believe that in an era when investors are seeking diversification away from traditional markets, EM corporate credit (particularly in hard currency) can play an important role in modern portfolios.

As well as improvements in quality, the breadth of opportunities has expanded considerably, with corporates growing 250% in size over the last 17 years¹. 66 countries are now represented in the JP Morgan CEMBI Broad Diversified index. As EM economies integrate into global markets, liquidity continues to improve, as does overall credit quality. The index comprises approximately 60% investment grade and 40% high yield issuers.

The asset class has shown itself to be a solid diversification option over the long-term. With higher yields, lower duration, and less leverage than US debt for comparable credit quality, it prospectively provides a compelling complement for institutional investors.

Figure 1: Improving Credit Ratings

Source: BoA EM Corp Chartbook Dec 25. Indices are unmanaged, and performance is shown gross of fees. One cannot invest directly in an index. 1. JP Morgan Corporate Emerging Markets Bond Broad Diversified index (CEMBI BD)

EM corporates are globally competitive players with international footprints and geographically diverse revenue sources. However, country-specific concerns frequently overshadow solid company fundamentals, pushing yields higher than comparable DM bonds and creating attractive risk-reward opportunities.

The Argentinian HY Corporate Bond Market is an interesting example (Figure 2), as it delivered close to 100% in terms of total return from 2020-2025 but with only a fraction of the volatility experienced by both hard and local Argentinian sovereign debt. This consistency of returns is why we focus on hard currency corporates across our credit capabilities.

Figure 2: Sovereign Risk ≠ Credit Risk Argentinian Total Returns USD hedged

Source: ICE as at 30 January 2026

We believe other managers in the EM space may overly rely on top-down, asset allocation investment processes which are driven by macroeconomic forecasts. However, in our view, the tendency for sovereign dynamics to overshadow fundamentals creates significant dislocations and in our view lends itself better to flexible, bottom-up investors who are willing to conduct rigorous credit analysis can exploit.

Man Emerging Market Corporate Credit Capabilities

The Man EM Corporate Credit team, led by the highly experienced Kaushik Rambhiya, deploy a bottom-up investment approach which aims to deliver consistent performance throughout the cycle. The team seeks to identify bonds which have an attractive valuation, idiosyncratic drivers of return and a resilient credit profile. Kaushik is supported by two senior analysts and together they manage both long-only and long-short capabilities.

Table 1: Fund Summaries

Source: Man Group as at 27 February 2026

The key driver of returns within our strategies will be security selection, with each bottom-up investment decision supported by thorough fundamental analysis with a focus primarily on hard currency corporates with a selective approach in hard currency sovereigns. Having said this, an understanding of country specifics is key for emerging market investing and as a result, the team remain macro aware and take into account sovereign fundamentals into top-down allocation views across countries.

The investment team has deep expertise in fundamental credit research, bringing over 40+ cumulative years’ experience of analyzing the credit worthiness of issuers across emerging markets. With two dedicated analysts supporting our Lead Portfolio Manager, Kaushik, we believe this provides a solid foundation for a disciplined credit underwriting approach.

Proof in the Performance – 3 year Long/Short Track Record

Since the launch of Kaushik Rambhiya’s long/short Man Emerging Markets Corporate Credit Alternative (UCITS), the Fund has delivered 13.43% of annualised returns, outperforming peers and credit betas alike. From a risk-adjusted return basis, the fund has been able to deliver Sharpe and Sortino ratios of 3.8 and 5.6 respectively.

Figure 3: Emerging Market Corporate Credit Alternative Cumulative Total Returns

Data as at 27 February 2026. Performance data is shown for the Man Emerging Markets Corporate Credit Alternative IN USD share class, net of fees with income reinvested and does not take into account sales and redemption charges where such costs are applicable. Returns are calculated net of fees. Other share classes may charge higher fees. Launch date: 7th February 2023. Past performance is not indicative of future results. Returns may increase or decrease as a result of currency fluctuations.

Table 2: Emerging Market Corporate Credit Alternative Statistics

Source: Man Group as at 27 February 2026. Past performance is not indicative of future results. Returns may increase or decrease as a result of currency fluctuations.

Proof in the Performance – Man Emerging Markets Corporate Credit Opportunities Track Record

In response to strong demand, Kaushik and the team have also launched a long-only fund. This strategy remains highly flexible but is more benchmark aware than the long/short. It is expected to retain a duration of +/- 2 years versus the index and will not be an active buyer of CCC rated assets. Since launch over a year ago, the fund has delivered +3.31% p.a. cumulatively ahead of its index.

Figure 4: Emerging Market Corporate Credit Opportunities and Benchmark Total Returns

Data as at 27 February 2026. Performance data is shown for the Man Emerging Markets Corporate Credit Opportunities share class, net of fees with income reinvested and does not take into account sales and redemption charges where such costs are applicable. Returns are calculated net of fees. Other share classes may charge higher fees. Launch date: 7th February 2025. J.P. Morgan CEMBI Broad Diversified Index is an official benchmark of the fund.

Table 3: Emerging Market Corporate Credit Opportunities Statistics

Source: Man Group as at 27 February 2026.

Past performance is not indicative of future results. Returns may increase or decrease as a result of currency fluctuations.

Additional Information: EMCC Long-Short Strategy

Kaushik’s longer Man Group Strategy has generated positive returns in every year since 2019 including 2021 and 2022 when the broad market was down significantly. From a risk-adjusted return basis, the Strategy has been able to deliver Sharpe and Sortino ratios of 1.2 and 1.7 respectively.

Figure 5: Performance track record (Feb’19-Dec’25)

Source: Man Group as at 27 February 2026

Table 4: Key stats

Data as at 31 December 2025. Performance is based on the Asia and EM books in a similar strategy on an equal weighted basis with a daily rebalance. Strategy start date: February 2019. 2. ICE BofA. Certain indices/measures mentioned on this page have been provided for information purposes only. They are intended to provide a comparative indication of particular asset classes, investment sectors, or financial markets more widely ("market backdrop"). Unless indicated otherwise, the investment process of the strategy is independent of these indices/measures.

The simulation uses a 50/50 split between the two books from 2019 to January 2023, with a fee structure of 0.25% management fee and 20% performance fee. From February 2023 onwards, it uses a weighted average allocation between the two books and the EMCCA fund's AUM, to calculate the net returns.

The Strategy has an upside capture of 169% and a low downside capture of 26% vs the JPM EM Corporate Index which showcases the strong upside participation relative to downside capture of the strategy.

Alongside this strong return profile, the team has demonstrated a continuous ability to endure shallower drawdowns than credit indices and other players in space, proving the benefits of rigorous credit research and robust risk management.

Figure 6: Drawdown Analysis

Data as at 31 December 2025. Performance is based on the Asia and EM books in a similar strategy on an equal weighted basis with a daily rebalance. Strategy start date: February 2019. 2. ICE BofA. Certain indices/measures mentioned on this page have been provided for information purposes only. They are intended to provide a comparative indication of particular asset classes, investment sectors, or financial markets more widely ("market backdrop"). Unless indicated otherwise, the investment process of the strategy is independent of these indices/measures. 

The simulation uses a 50/50 split between the two books from 2019 to January 2023, with a fee structure of 0.25% management fee and 20% performance fee. From February 2023 onwards, it uses a weighted average allocation between the two books and the EMCCA fund's AUM, to calculate the net returns

Short positions may be used to hedge out unwanted sovereign exposure or as an alpha generating position depending on the opportunity

Investment Policy : Man Emerging Markets Corporate Credit Alternative

The Fund aims to provide investors with positive absolute returns, through both long and short investments in emerging market corporate and sovereign bonds.

The Fund will invest in a portfolio of emerging markets corporate and sovereign bonds. The Fund will take either long or synthetic short positions and may seek to avail itself of event driven investment opportunities, focussing on company, sector and country related opportunities. The Fund will use a bottom-up (evaluating each individual issuer rather than looking at movements in prices within a particular market or market segment), fundamental approach. The Fund may be fully exposed to below investment grade securities or in unrated securities under normal market conditions. The Fund will not have a specific sectoral or industrial focus. The Fund may be fully exposed to emerging markets. The Fund may increase its holdings of cash and other liquid assets in times of exceptional market circumstances or where it is of the opinion that there are insufficient investment opportunities.

The Fund is actively managed. The Fund is not managed with reference to a benchmark.

Investment Policy : Man Emerging Markets Corporate Credit Opportunities

The Fund's investment objective is to provide income and capital growth over the medium to long term.

The Fund will invest in a portfolio of emerging markets corporate and sovereign bonds. The Fund will take either long or synthetic short positions and may seek to avail itself of event driven investment opportunities, focusing on company, sector and country related opportunities. The Fund will use a bottom-up (evaluating each individual issuer rather than looking at movements in prices within a particular market or market segment), fundamental approach. Please refer to the Fund’s Prospectus/Offering documents for additional details regarding the Investment policy.

The Fund is actively managed and does intend to outperform the J.P. Morgan CEMBI Broad Diversified Index (the "Benchmark") over the medium to long term. Although the Benchmark may be used for performance comparison purposes, the Fund's investment policy is not constrained by the Benchmark. The Fund can deviate substantially from the issuer, country and sector weightings of the Benchmark and there are no restrictions on the deviation from the Benchmark.

 

Important considerations

Prior to investing in the Fund investors should carefully consider the risks associated with investing, whether the Fund suits their investment requirements and whether they have sufficient resources to bear any losses which may result from an investment in the Fund. Investors should only invest if they understand the terms on which the Fund is offered. Investors should consider the following risks and where appropriate seek professional advice before investing:

Investment Objective Risk - There is no guarantee that the Fund will achieve its investment objective.

Market Risk - The Fund is subject to normal market fluctuations and the risks associated with investing in international securities markets. Therefore, the value of your investment and the income from it may rise as well as fall and you may not get back the amount originally invested.

Counterparty Risk - The Fund will be exposed to credit risk on counterparties with which it trades in relation to on-exchange traded instruments such as futures and options and where applicable, 'over-the-counter' ("OTC","non-exchange") transactions. OTC instruments may also be less liquid and are not afforded the same protections that may apply to participants trading instruments on an organised exchange.

Currency Risk - The value of investments designated in another currency may rise and fall due to exchange rate fluctuations. Adverse movements in currency exchange rates may result in a decrease in return and a loss of capital. It may not be possible or practicable to successfully hedge against the currency risk exposure in all circumstances.

Liquidity Risk - The Fund may make investments or hold trading positions in markets that are volatile and which may become illiquid. Timely and cost efficient sale of trading positions can be impaired by decreased trading volume and/or increased price volatility.

Financial Derivatives - The Fund will invest financial derivative instruments ("FDI") (instruments whose prices are dependent on one or more underlying asset) to achieve its investment objective. The use of FDI involves additional risks such as high sensitivity to price movements of the asset on which it is based. The extensive use of FDI may significantly multiply the gains or losses.

Leverage Risk- The Fund's use of FDI may result in increased leverage which may lead to significant losses.
Total Return - Whilst the Fund aims to provide capital growth over the medium to long term a positive return is not guaranteed over any time period and capital is in fact at risk.

Emerging Markets - The Fund may invest a significant proportion of its assets in securities with exposure to emerging markets which involve additional risks relating to matters such as the illiquidity of securities and the potentially volatile nature of markets not typically associated with investing in other more established economies or markets.

Hybrid Securities - The Fund may invest in contingent convertible ("coco") bonds. The performance of such bonds is dependent on a number of factors including interest rates, credit and equity performance, and the correlations between factors. As such these securities introduce significant additional risk to an investment in the Fund.

Non-Investment Grade Securities - The Fund may invest a significant proportion of its assets in non-investment grade securities (such as "high yield" securities) are considered higher risk investments that may cause income and principal losses for the Fund. They are instruments which credit agencies have given a rating which indicates a higher risk of default. The market values for high yield bonds and other instruments tend to be volatile and they are less liquid than investment grade securities.

Distressed Securities - The Fund invests a significant proportion of its assets in securities issued by distressed companies that are either in default or in high risk of default, such investments involve significant risk.

Man Emerging Markets Corporate Credit Opportunities only:

Single Region/Country Risk - The Fund is a specialist country-specific or geographic regional Fund, the investment carries greater risk than a more internationally diversified portfolio.

Man Emerging Markets Corporate Credit Alternative only: Total Return - Whilst the Fund aims to provide capital growth over the medium to long term a positive return is not guaranteed over any time period and capital is in fact at risk.

A complete description of risks is set out in the Fund's prospectus.

 

Important Information

This material is of a promotional nature.

The Man Emerging Markets Corporate Credit Opportunities fund (EMCCO) is a sub-fund of Man Funds plc, domiciled in Ireland and registered with the Central Bank of Ireland.

The Man Emerging Markets Corporate Credit Alternative fund (EMCCA) is a sub-fund of Man Funds VI plc, domiciled in Ireland and registered with the Central Bank of Ireland.

Full details of the Fund's objectives, investment policy and risks are located in the Prospectus which with the Key Investor Information Document (KIID) / Key Investor Document (KID), and the Report and Accounts of the UCITS, are accessible free of charge from the local information/paying agent, from authorised distributors and from www.man.com/documents. The KIID/KID is available in English and in an official language of the jurisdictions in which the Fund is registered for public sale. The Prospectus and the Reports and Accounts of the UCITS can be obtained in English. In Switzerland, the Prospectus is also available in German.

In Spain: Full prospectuses, KIDs, statutes and annual and semi-annual accounts of the investment products are available free of charge at the offices of the Spanish distributors authorised in Spain. A list of the Spanish distributors authorised and their contact details can be obtained on the Comisión Nacional del Mercado de Valores ("CNMV") website: www.cnmv.es.

Man Funds plc: The sub-funds mentioned herein are authorised to be marketed to the public in Spain and belong to the Man Funds plc that is registered with the CNMV with registration number 296.

Man Funds VI plc: The sub-funds mentioned herein are authorised to be marketed to the public in Spain and belong to the Man Funds VI plc that is registered in the Comisión Nacional del Mercado de Valores (hereinafter the "CNMV") with the number 882.

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For the avoidance of doubt, if you decide to invest, you will be buying units/shares in the Fund and will not be investing directly in the underlying assets of the Fund. Before deciding to invest, investors should consider all fund characteristics and objectives as outlined in the prospectus or related documents, please refer to the KID / KIID for information on commissions, fees, and other charges. The difference at any one time between the sale and repurchase price of a unit in the UCITS means that the investment should be viewed as medium term to long term.

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EMCCA only:

More than 35% of the Fund's total holdings in bonds may be issued by or guaranteed by:

• EU and OECD Governments
• EU member state, by its local authorities, by any other OECD member state, or by any public international body of which one or more EU member states are members. For more information please refer to the prospectus.

The value of an investment and any income derived from it can go down as well as up and investors may not get back their original amount invested. Alternative investments can involve significant additional risks.

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This material is for information purposes only and does not constitute an offer or invitation to invest in any product for which any Man Group plc affiliate provides investment advisory or any other services. It is not contractually binding nor does it represent any information required by any legislative provision. Prior to making any investment decisions, investors should read and consider the fund's offering documents.

Opinions expressed are those of the author as of the date of their publication, and are subject to change.

Some statements contained in these materials concerning goals, strategies, outlook or other non-historical matters may be "forward-looking statements" and are based on current indicators and expectations at the date of their publication. We undertake no obligation to update or revise them. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those implied in the statements.

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EMCCO only:

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Further information on the sustainability-related aspects of the Fund can be at https://www.man.com/man-emerging-markets-corporate-credit-opportunities…

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EMCCO only:

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