Episode 116: Opportunities in EM Debt with Tom Smith of MetLife Investment Management

In this episode of the InsuranceAUM.com podcast, Stewart Foley speaks with Tom Smith, Emerging Market Portfolio Manager at MetLife Investment Management, to explore current dynamics and future opportunities within emerging market debt (EMD). Tom shares his experienced perspective on the macroeconomic factors impacting EM debt, including the aftereffects of the pandemic, inflationary pressures, China’s reopening, and the ongoing conflict in Ukraine. Despite recent volatility, Tom explains that easing pressures could create a more favorable environment for EMD in 2023, with stronger fundamentals seen in emerging market corporate and sovereign debt.

Tom also discusses why EM corporates stand out with strong balance sheets and lower leverage than their U.S. peers, making them attractive for insurance investors focused on capital preservation. He provides insights into the stabilizing trends in sovereign debt and the potential for spread compression if macro conditions continue to improve. Tom emphasizes the need for a careful, selective approach, highlighting the resilience of certain EM credits and noting that MetLife Investment Management prioritizes capital preservation in their EM strategies.