Survival and revival: The keys to portfolio management in a crisis

Laying the foundations for a market rebound

Given the heightened volatility environment – with a series of multi-sigma credit spreads spikes since the end of February – the decisions we take over the next three months are likely to disproportionately influence our returns for the next three years.

This is my sixth emerging market (EM) credit cycle - after 2008, 2011, 2013, 2015 and 2018. For the EM community, these cycles seemingly happen every two years - either in specific countries or, as now, for the entire market. However, the good news is this is only the second worst cycle of my career. Recent volatility spikes are reminiscent of the global financial crisis, but the difference is I am not doubting the fabric of financial architecture and counterparty stability today. Covid-19: Who bears the business loss? Nonetheless, we have a plan. It has two coinciding steps. The f...