The curated database of hedge funds that publish investor letters. Research by geography, strategy, and schools of thought.
| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
The core investment thesis focuses on exploiting country-specific fundamental differentiation and structural growth opportunities within emerging markets fixed income during a higher-for-longer interest rate regime. In the second quarter of 2026, emerging market debt generated solid positive performance, driven primarily by supportive carry and resilient global expansion, despite sticky inflation and elevated real rates in the United States. Key positive performance drivers included spread compression in high-yield and frontier sovereign credits, particularly those anchored by International Monetary Fund programs or experiencing positive ratings upgrades. Geopolitically, the temporary cooling of U.S.-Iran hostilities eased energy price volatility, benefiting net energy importers while presenting headwinds for certain exporters. The manager maintains a selective, constructive posture, focusing positioning on sovereign credits with credible fiscal consolidation pathways, substantial reserve accumulation, and exposure to secular tailwinds like artificial intelligence infrastructure. Significant risks to this outlook include potential flare-ups in Middle Eastern conflicts, persistent global inflation preventing Federal Reserve rate cuts, and fiscal slippages in vulnerable emerging market countries lacking adequate cushions.
Emerging markets debt offers attractive returns in a higher-for-longer interest rate environment through bottom-up selection of sovereign credits demonstrating credible fiscal adjustment, structural reform progress, and strong policy frameworks.
The manager is constructive but highly selective for the next 12 months, expecting returns to be driven primarily by carry and income rather than aggressive spread compression. High-yield and frontier credits with credible IMF anchors or rating momentum are expected to outperform, while the outlook for local currency debt is more nuanced due to persistent U.S. rate support and country-specific fiscal risks.
As of Jun 30, 2026
James E. Craige, CFA, serves as Chief Investment Officer and co-founder of Stone Harbor Investment Partners, with extensive industry experience dating back to 1988. Stuart Sclater-Booth serves as Deputy Chief Investment Officer and Portfolio Manager, bringing experience since 1992 with background from Goldman Sachs and J.P. Morgan. The broader management team includes portfolio managers Darin Batchman, Richard Lange, and economist Steffen Reichold. The management team maintains an average tenure of 13.7 years, demonstrating significant stability and expertise in emerging markets debt management. Effective January 2024, Stone Harbor and Newfleet Asset Management combined their emerging markets debt portfolio management teams.
Stone Harbor Investment Partners is an emerging markets debt manager with three decades of informed experience allocating risk in complex areas of the fixed income markets. The Fund seeks to maximize total return, consisting of income and capital appreciation, by investing at least 80% of net assets in Emerging Markets Fixed Income Securities. The investment approach is based on a value-oriented, bottom-up approach to corporate investing combined with a top-down macroeconomic outlook. The investment process emphasizes country selection based on intensive economic and political analysis, as well as a rigorous analytical approach to currency, sector, and security selection. The firm conducts multi-level risk management from security, company, industry, and sovereign perspectives.
Lead Portfolio Manager
James E. Craige, Stuart Sclater-Booth
Managing Partner
Neutral / Balanced
Market Conviction
The conviction score is set at 0.45, reflecting a low-moderate rating due to the broad, thematic, and highly diversified nature of the commentary. The report does not detail specific portfolio weights, single-country sizes, or concentrated holdings, focusing instead on high-level macro trends and index benchmarks. This diversified strategy inherently indicates a more spread-out risk profile than a high-conviction concentrated fund.
Growth Outlook
The manager's outlook is scored at 0.75, representing a constructive but selective view. The report emphasizes solid carry cushions and resilient global growth, balanced by sticky U.S. inflation. This creates a supportive environment for selective sovereign debt, though broad-based rally beta is limited.
Risk Appetite
The risk appetite is scored at 0.50, reflecting a balanced and highly selective positioning stance. Instead of deploying capital into broad risk assets, the team focuses on sovereign credits with credible fiscal consolidation and clear catalysts. This defensive-to-neutral tilt is designed to capture carry while avoiding high-beta vulnerability.
Capital Deployment
Capital deployment is rated 0.50, as the letter suggests stable, net neutral activity with limited broad deployment. The team is selectively holding or adjusting exposures based on country-specific reforms rather than actively increasing or decreasing overall portfolio cash levels. Optionality is preserved by focusing on income generation.
Forward Guidance
Forward guidance is rated 0.50, indicating a monitoring phase with no aggressive directional action bias. The manager expects returns to be driven primarily by coupon income rather than major spread compression. They outline a patient approach of waiting for policy credibility to improve in key regions like Brazil before extending duration.
Language Signal
The language signal is scored at 0.65, leaning slightly positive. While the letter contains constructive terms such as resilient growth, supportive carry, and positive upgrades, it is tempered by cautionary warnings regarding fiscal slippages and Middle East geopolitical shocks. This creates a net positive but guarded linguistic tone.
Perceived Risk
Perceived risk is scored at 0.70, reflecting significant, clearly identified headwinds in the global macro environment. The manager frequently highlights the threats of a prolonged higher-for-longer Fed policy, potential Middle East escalation, and fiscal vulnerabilities in energy-importing regions like Africa. These risks are described as critical watchpoints that could destabilize performance if global financial conditions tighten.
Opportunity Density
Opportunity density is scored at 0.60, representing a selective opportunity set. The manager notes that while broad-based spread compression is unlikely, there are still plenty of specific opportunities in high-yield and frontier credits. These opportunities require rigorous bottom-up credit selection rather than passive index exposure.
Time Horizon
The time horizon is scored at 0.55, indicating a medium-term outlook of 1 to 3 years. The letter outlines a base case covering the next 12 months, with performance heavily dependent on medium-term reform execution and IMF program progress. The manager's thesis relies on gradual policy normalization rather than immediate catalyst resolutions.
Top Conviction Themes
Key Catalysts
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