Mary-Thérèse Barton from Pictet AM is our Fund Manager of the Month

Mary-Thérèse Barton, Chartered Financial Analyst, CFA, joined Pictet AM in 2004. She currently manages a number of emerging sovereign and corporate debt investment strategies. She previously worked at Dun & Bradstreet as an economist responsible for European country analysis. She holds a BA (Hons) degree in Philosophy, Politics, and Economics from Balliol College, Oxford, and an MA (Hons) in Development Finance from the Centre for Financial Management Studies (School of Oriental and African Studies), University of London.

What made you decide to work in the financial sector? Did you have any other vocations?

After obtaining my bachelor’s degree in philosophy, politics, and economics at the University of Oxford and before joining Pictet, I worked as an economist for an American firm analyzing western European countries. My passion however lay in emerging markets, following my personal interest and academic slant. I joined Pictet at the beginning of 2004, initially being part of a very small team.

What do you like most about your job? And what do you like least?

One of the best things about my role as head of emerging market fixed income is that no day is the same. To be successful in emerging markets, one needs to have a holistic view of both economic and social issues in each country across Asia, Eastern Europe, and Latin America. It is also important to look beyond traditional macroeconomic research. We partnered with EMpower, a very well-respected charity linked to the emerging markets finance community focusing on at-risk youth to understand the issues those countries face. Anyhow, being head of an emerging market fixed income is part of a long journey.

How do you manage emotions in times of market crisis?

Focus on the long term and our objective, to steward our investor's capital through volatile markets through strong processes, robust research, and a team culture, that is hard working and supportive. Ultimately, teamwork and a shared vision!

Could you mention a fund you think is going to do well in 2023? Why?

The case for emerging markets' local fixed income is strong this year. Within a refocus on a fixed income, emerging markets local debt is attractive from the potential for foreign currency appreciation as capital is attracted for the positive growth differential (driven by China reopening) versus developed markets. Also, bond markets are performing well and in some emerging economies central banks can be among the first to start cutting rates. Furthermore, investors are under-allocated to this segment of the bonds market.

Currently, what is the asset allocation in your portfolios?

Currently, there is spread dispersion within high-yield hard currency debt, and we see opportunities as the market often overestimates the default risk, while investment-grade debt trades at historically tight levels. The average recovery rate in hard currency has been 50 cents/dollar and in 2022 the market estimated 20 in some segments of the market. But we don't expect it to trade far from its long-term recovery value, with the possibility of spread compression. Latin America tends to be a net debtor with high inflation and Asia a net creditor with low inflation. But although Brazil and Chile have significant external financing needs, they also have a strong willingness to pay, and their risk premium seems high. We are aware of political risks but see value in Brazil's local debt as well as in some parts of the yield curve in South African and Indonesian debt. In hard currency, we see value in Argentina with general elections this autumn and the possibility of more focus on orthodox policies. There will be challenges but there also is significant potential.

If you had to define yourself in three words, what would they be and why?

Curious, dedicated, and maybe… impatient at times!

What do you most enjoy doing? What are your hobbies?

Of course, it makes me smile when all trades are going well, but I have to say that what I most enjoy is seeing my three children every day. I love the radio and listening to current affairs programs and music on Saturdays. Apart from that, I am a trustee and co-chair of the Finance Committee of Cloudesley Charity, which supports vulnerable people in the London Borough of Islington.