Industry Voice: New country research head explains how role will enhance Eaton Vance's edge in EM debt

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Marshall L. Stocker, Ph.D., CFA
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Marshall L. Stocker, Ph.D., CFA

This Q&A focuses on the recent appointment of Dr. Marshall Stocker as Director of Country Research within the Global Income team and what this means for the firm’s EM debt clients

How did this new role come about?

For most of my six years at Eaton Vance, I have been a mentor and coach to our research associates who undertake the day-to-day, country-level research. In consultation with the co-directors of the Global Income team, Mike Cirami and Eric Stein, we decided - given my continued interest in both the research process and mentoring our newer research professionals - that it would be valuable to formalise the role. Having one of the senior portfolio managers, like myself, serve as Director of Country Research also emphasises the importance we attach to conducting country-level research. Another reason my role was created relates to the increasing levels of interest from prospective investors and clients in how we conduct research. One of my responsibilities as Director of Country Research will be to centralise the engagement we have with prospects and existing clients by communicating and distilling our research process to an external audience. As our business continues to grow, we want to make sure that all of our activities are conducted in the most efficient manner possible. Centralising the management of research is part and parcel of this ongoing endeavour.

How did you become interested in country research?

Why is it important? Nearly 20 years ago, I attended a lecture on the concept of economic freedom and how it related to socioeconomic outcomes. Countries were ranked in terms of economic freedom with Hong Kong and Singapore at the top, along with a number of other former British colonies. Utilising this ranking, academicians began demonstrating that in countries with a high level of economic freedom, people lived longer, there was less child labour, greater access to clean water, along with everything else that one associates with social-economic well-being. This led me to join an academy of economists who study what differentiates the economic outcomes of countries. Pursuing this as an intellectual interest, in 2005, I published an academic journal article that related economic freedom to equity market returns.¹ Much to my disappointment, I found no relationship between the level of economic freedom and equity market returns. Rather, what showed up in the empirical analyses (I published further on this topic in 2016²) is the importance of the direction of change in government policy. Simply put, you want to invest in countries where economic freedom is increasing and avoid those where economic freedom is decreasing. Never mind what the current conditions are. Since then, I went on to write a Ph.D. thesis and have had various articles published on currency and bond markets and their relationships to economic freedom. In mid-2019, I published results of a study relating economic freedom to emerging-markets debt returns. Again, what shows up is a clear correlation between country-level economic policy change and investment returns. So yes, my intellectual interests over the past 20 years or so have centred on the relationship between government policy, social-economic well-being and investment returns. What is demonstrably evident, to me at least, is that country-level research should be a core part of EM investing. In fact, one of the reasons I was drawn to join Eaton Vance's Global Income team in the first place is our like-mindedness on this point. The team focuses specifically on individual countries and government policies.

What was your role prior to being appointed Director of Country Research?

From the time I joined Eaton Vance six years ago until April 2019, I was the global macro equity strategist within the Global Income team. This might sound odd: having an equity portfolio manager within a "Global Income" team, but remember that our Global Income team also runs absolute return strategies (e.g., global macro and global macro advantage), which focus on country-level research and endeavour to identify changes in government policies that would relate to or affect asset class returns, including equity market returns. Within the Global Income team, there have always been synergies between the macro equity research efforts and EM debt team's investment professionals, who spend each day thinking about country-level risks, opportunities and changes in policies. This is also the reason we manage our emerging- and frontier-market equity fund from the global income desk. Prior to joining Eaton Vance, I was a direct investor residing in North Africa.

 

 

Important Additional Information and Disclosures

Source of all data: Eaton Vance, as at 6 September 2019, unless otherwise specified.

This material is presented for informational and illustrative purposes only. This material should not be construed as investment advice, a recommendation to purchase or sell specific securities, or to adopt any particular investment strategy; it has been prepared on the basis of publicly available information, internally developed data and other third-party sources believed to be reliable. However, no assurances are provided regarding the reliability of such information and Eaton Vance has not sought to independently verify information taken from public and third-party sources. Investment views, opinions, and/or analysis expressed constitute judgments as of the date of this material and are subject to change at any time without notice. Different views may be expressed based on different investment styles, objectives, opinions or philosophies. This material may contain statements that are not historical facts, referred to as forward-looking statements. Future results may differ significantly from those stated in forward-looking statements, depending on factors such as changes in securities or financial markets or general economic conditions. This material is for the benefit of persons whom Eaton Vance reasonably believes it is permitted to communicate to and should not be forwarded to any other person without the consent of Eaton Vance. It is not addressed to any other person and may not be used by them for any purpose whatsoever. It expresses no views as to the suitability of the investments described herein to the individual circumstances of any recipient or otherwise. It is the responsibility of every person reading this document to satisfy himself as to the full observance of the laws of any relevant country, including obtaining any governmental or other consent which may be required or observing any other formality which needs to be observed in that country. Unless otherwise stated, returns and market values contained herein are presented in US dollars. In the United Kingdom, this material is issued by Eaton Vance Management (International) Limited ("EVMI"), 125 Old Broad Street, London, EC2N 1AR, UK, and is authorised and regulated by the Financial Conduct Authority. EVMI markets the services of the following strategic affiliates: Parametric Portfolio Associates® LLC ("PPA"), an investment advisor registered with the SEC. Hexavest Inc. ("Hexavest") is an investment advisor based in Montreal, Canada and registered with the SEC in the United States, and has a strategic partnership with Eaton Vance, and Calvert Research and Management ("CRM") is an investment advisor registered with the SEC. This material is issued by EVMI and is for Professional Clients/Accredited Investors only. This material does not constitute an offer to sell or the solicitation of an offer to buy any services referred to expressly or impliedly in the material in the People's Republic of China (excluding Hong Kong, Macau and Taiwan, the "PRC") to any person to whom it is unlawful to make the offer or solicitation in the PRC. The material may not be provided, sold, distributed or delivered, or provided or sold or distributed or delivered to any person for forwarding or resale or redelivery, in any such case directly or indirectly, in the People's Republic of China (the PRC, excluding Hong Kong, Macau and Taiwan) in contravention of any applicable laws. Eaton Vance Asia Pacific Ltd. is a company incorporated in the Cayman Islands with its Japan branch registered as a financial instruments business operator in Japan (Registration Number: Director General of the Kanto Local Finance Bureau (Kinsho) No. 3068) and conducting the Investment Advisory and Agency Business as defined in Article 28(3) of the Financial Instruments and Exchange Act (as amended) ("FIEA"). Eaton Vance Asia Pacific Ltd. is acting as an intermediary to promote asset management capabilities of Eaton Vance Management (International) Limited and other Eaton Vance group affiliates to registered financial instruments business operators conducting the Investment Management Business, as defined in the FIEA. Eaton Vance Asia Pacific Ltd. is a member of JIAA Japan with registration number 01202838. In Singapore, Eaton Vance Management International (Asia) Pte. Ltd. ("EVMIA") holds a Capital Markets Licence under the Securities and Futures Act of Singapore ("SFA") to conduct, among others, fund management, is an exempt Financial Adviser pursuant to the Financial Adviser Act Section 23(1)(d) and is regulated by the Monetary Authority of Singapore ("MAS"). Eaton Vance Management, Eaton Vance Management (International) Limited and Parametric Portfolio Associates® LLC holds an exemption under Paragraph 9, 3rd Schedule to the SFA in Singapore to conduct fund management activities under an arrangement with EVMIA and subject to certain conditions. None of the other Eaton Vance group entities or affiliates holds any licences, approvals or authorisations in Singapore to conduct any regulated or licensable activities and nothing in this material shall constitute or be construed as these entities or affiliates holding themselves out to be licensed, approved, authorised or regulated in Singapore, or offering or marketing their services or products. In Australia, EVMI is exempt from the requirement to hold an Australian financial services license under the Corporations Act in respect of the provision of financial services to wholesale clients as defined in the Corporations Act 2001 (Cth) and as per the ASIC Corporations (Repeal and Transitional) Instrument 2016/396. EVMI is registered as a Discretionary Investment Manager in South Korea pursuant to Article 18 of Financial Investment Services and Capital Markets Act of South Korea. EVMI utilises a third-party organisation in the Middle East, Wise Capital (Middle East) Limited ("Wise Capital"), to promote the investment capabilities of Eaton Vance to institutional investors. For these services, Wise Capital is paid a fee based upon the assets that Eaton Vance provides investment advice to following these introductions. In Germany, Eaton Vance Management (International) Limited, Deutschland ("EVMID") is a branch office of EVMI. EVMID has been approved as a branch of EVMI by BaFin. Mutual Funds are distributed by Eaton Vance Distributors, Inc. ("EVD"). Two International Place, Boston, MA 02110, (800) 225-6265. Member FINRA/ SIPC. Eaton Vance Investment Counsel. Two International Place, Boston, MA 02110. Eaton Vance Investment Counsel is a wholly-owned subsidiary of EVC and is registered with the SEC as an investment adviser under the Advisers Act. 

 

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