M&G's Calich cuts exposure to currencies 'at epicentre' of US-China trade war storm

Move to avoid currencies at risk of underperforming

Claudia Calich, manager of the £647.9m M&G Emerging Markets Bond fund, has been buying into opportunities created by the escalating US-China trade war.

The manager began reducing exposure to local currency instruments in the summer of 2018 on the view the trade battle between the US and China would cause some of the currencies to underperform, for example currencies "at the epicentre of the storm" such as Asian currencies (currently 7%), as well as riskier currencies and those dependent on commodities, such as South Africa (a 1% position). The seven challenges facing EMD investors Calich said she has maintained this position for most of this year, rotating "a little bit within some of the currencies", including adding to the portfoli...