This interview has been edited for length and clarity.

Duncan Wales

Welcome to the Emerging Markets podcast by Tellimer with me, Duncan Wales, Founder and CEO of Tellimer. I'm delighted to be joined by Elina Theodorakopoulou, Managing Director and Portfolio Manager in Global Fixed Income at Manulife Investment Management. Elina is an accomplished leader in fixed income investing and is currently particularly focused on emerging markets sovereign debt.

Before joining Manulife in 2019, Elina served as the lead manager of two absolute return fixed income funds at Fulcrum Asset Management, where she was also a senior member of the Global Macro Discretionary team. Her earlier experience includes roles at Société Générale and Santander Global Banking.

Elina is a frequent speaker at international events and holds a BSc from the Athens University of Economics and Business and a Masters in International Securities, Investment and Banking from the ICMA Centre at Henley Business School, University of Reading. Elina, welcome to the pod.

Elina Theodorakopoulou

Well, hi Duncan, and thank you very much for inviting me and I'm honoured, to say the least, because this year I had the pleasure of joining you in one of your brilliantly run seminars and open public speaking events. And so I’m excited to join you on this occasion as well.

Duncan Wales

Well, Elina, that's very kind of you to say, but the reason I invited you on the podcast is you are a naturally brilliant speaker and a very clear thinker, and obviously come with amazing professional credentials and experience.

So, lots of thinking about emerging markets, particularly on the sovereign debt side. It has been a little bit of a ride year to date. We're just sort of coming to the end of the first half and, you know, what do you make of it all?

Elina Theodorakopoulou [1:51]

Yes, it was a joyride and today, June 30, does mark the end of the first half of the year, and the events that we've had to navigate for the past six months have shown signs of nothing but uncertainty and volatility. But where we are now is just a testament to how resilient the asset class has been. Performance has been great. If you're looking at how, for example, high grade has been performing, carry is quite telling.

So, all in all, when taking stock of the first half of the year, this summer, it feels nice. The asset class is giving you yield and in terms of forward thinking, a lot of reasons to see the glass as half full.

Duncan Wales

Yeah, as you say, despite complex global events and economic uncertainties, emerging markets as an asset class has performed very solidly indeed. And in fact, local currency debt, as I think you know, up until pretty recently, year to date, was the best performing asset in markets, pretty much.

Elina Theodorakopoulou

It is. It's quite multifaceted and I'm sure we'll have the opportunity to touch on these angles. But in general, it has been quite a nice development, relative to how we embarked on the year and the things that we had to look forward to and other things that materialized. 

And yet again, we’re in a position to talk about strong, solid performance, and meeting once again to discuss the depth and breadth of the asset class. So yeah, very, very excited to be on this journey with you, not just on the ride we've seen this year, but also, discussing the ride on this podcast.

Duncan Wales [3:59]

Yeah. Well, as you know, a while ago, I mean literally the day after Liberation Day— and no doubt we'll come back to this topic of U.S. trade policy—but the day after Liberation Day, a number of our clients said to me that to the extent they had the ability to do so, they would allocate away from dollar-denominated assets and well, U.S. assets, but also dollar-denominated assets, because there are yielding, interesting, uncorrelated assets away from exposure to the U.S. that are worth exploring. So, one of the, I guess, advantages of emerging markets in a moment like this is that lack of correlation.

Elina Theodorakopoulou

It is, and it gives you also a lot of opportunity for idiosyncratic stories and this is what you need when you're formulating your portfolio allocation. What you also need to have is all these drivers of your alpha, of your risk return, in a position to perform, irrespective of what is happening in the background. Certainly, everything has to do with what is happening on a global scale, whether we are dealing with conflicts, or with other big events. But the reality is: you do need to have these opportunities from an investment allocation perspective. And we have to have, within our asset class, these sorts of idiosyncratic stories. This is our job. This is why we're getting paid. We need to be in a position to find these opportunities and make the most of them in a risk-adjusted manner. So yeah, I totally concur. And picking up on the point that you mentioned, it's also not a surprise that we're also seeing these green shoots when it comes to flows into our asset class. We have been navigating this for a couple of weeks now, since we saw this change. We’ve been seeing flows coming into the asset class and it's quite welcome to see. It hasn't been an easy few years for obvious reasons. the post-COVID years have been quite bruising for quite a few asset classes. But for quite a few weeks we've been seeing, let's say, a change in the tide, and we just need to make sure that gains more and more momentum.

Duncan Wales

Yeah. I mean the interesting thing about emerging markets is the huge range in diversity of assets that are now available. You know, if I think back 15 years, even on the debt side and compare it with now, there's so many more issuers, they've got so much more track record. They've got so much more in their curves. There's more coherence in the curves, certainly in external data in hard currency, but also of course the big growth in local currency instruments.

So, to hear that international money is now flowing into EMs as an asset class is pretty encouraging, considering there was definitely an asymmetry there in terms of supply and demand.

Elina Theodorakopoulou [6:58]

The evolution over the past two decades, the past 20 years, has been remarkable. The universe has expanded, which has brought benefits, which again goes back to your point of diversification, being able to express your views in different ways. And that's also the way that we think about the world through this high conviction approach, where you have the ability to express your view optimally, whether it's through the sovereign lens, whether it's through the corporate lens that is now available to us within our asset class, which perhaps when you look back two decades ago wasn't as established. So certainly, when you look at sovereign IG, at another 60% alongside corporate IG, translating to more market stability, and a very compelling duration profile. So yes, certainly a testament to the evolution of the asset class and more and more robust investment propositions that are available for us to express.

Duncan Wales

Yeah, fantastic. And so, as I look back over the last 6-9 months, there are some very extreme idiosyncratic stories out there. The one that leaps to mind, albeit it has defaulted, is Lebanon, which I think is now 300% up from September as a result of a new government, Hezbollah's influence on the country being reduced, and a variety of other factors, including, I suppose, the fall of the whole al-Assad regime in in Syria. So, a deeply idiosyncratic set of circumstances for that country.

Elina Theodorakopoulou

But again, you can count these stories on the fingers of one hand because they're coming on the back of such a big restructuring trend post-COVID. And a lot of these names and sovereigns that needed to be restructured, have accomplished it and come to the other end of the restructuring phase. Perhaps it was more prolonged than initially expected, but the reality is we're starting with a cleaner slate. So, at this juncture, there have been a lot of sensitivities. Certainly, you've already mentioned a handful of those, but that is also why we have seen such resilience in our asset class. Looking forward, you don't have that many candidates for default, and you have maturity walls that are more favourable than they were before, precisely because of restrictions we had quite recently. So, looking forward, certainly you might see some stalling in your upgrade/downgrade trend, but it doesn't necessarily mean that suddenly you're back to an environment where you're thinking a mass default is coming in terms of number of issuers. When you're distilling into corporates, they're in a much better state than they were—very solid, very sound. A lot of liability management exercising has been happening, especially in the first part of the year. So, all in all, you create a much healthier view of the asset class going forward.

Duncan Wales

Yeah, absolutely. I think the World Bank put out an analysis of default rates between developed and emerging economies on corporate credit, and emerging market default rates are actually lower. So, on the sovereign side, of course, as you just mentioned, there was a bit of a post-COVID series of defaults and a lot of them became complicated in their restructuring stories, notably Sri Lanka, and Zambia, to a certain extent, Ghana has now recovered and recovered very successfully. And a lot of the frontier economies that maybe a year ago we were all worried about in terms of another wave of potential default. So, I'm thinking of Kenya, Tunisia, Pakistan, Egypt, you know, none of those actually defaulted. And yes, obviously a lot of that was because of work done by our friends and colleagues at the IMF and indeed at the Treasuries and the governments, the administrations of those countries themselves, of course.

But they collectively did a good job getting some of those, you know, fiscal issues back in balance. So yes, there are a couple of countries who are having difficult times at the moment, you know, Bolivia, Senegal maybe. But you know, God willing, we're not going to have another big wave of defaults because the policy direction and as you say, resilience, of the asset classes has proven itself now.

Elina Theodorakopoulou [12:07]

And not just that, building on what you just meticulously explained, it's also about the sentiment—how investor sentiment has been improving, about having the ability to contain these big events that have been popping up the past few months. The most recent, clearly, has been the conflict. And from an investor point of view, you’ve been seeing, aside from oil, let's say, an amazing, miraculous round trip.

There wasn’t a lot of reaction when it came to the pricing of the spread on the U.S. Treasury curve, just because there was a realization that yes, we're talking about an extreme tail risk factor (if you can say tail risk). But then the probability of it was quite small. So, it was just a more pragmatic approach about what’s happening from a market perspective. And in general, what we’ve been seeing is an improvement in investor sentiment.

We have quite few things that are coming our way that are going to test that. First and foremost, we need to see how the approval process of the U.S. bill is going.

Duncan Wales

This is President Trump's big, beautiful bill?

Elina Theodorakopoulou [13:38]

Yes, how this administration's agenda pans out, and then the market will be able to price in the results with more clarity. And in general, we just need to see how things are settling in with the trade negotiations.

In a week or two, we’ll be coming up to the next deadline. And we’ve been receiving communications from the administration that some deals have already happened. I'm sure there’s a long list of countries that are waiting their turn to have negotiations and they and their technical teams must be extremely busy. But all of this just adds up to the much-needed clarity that we need. Not just us, everyone in the marketplace, to be able with more confidence to predict what is coming our way. But all in all, we went from a period with a lot of uncertainty, and even discussion about a U.S. recession, and we're certainly not there anymore. There has been some natural softening in the growth data that we've been seeing, but discussion about the recession has been subsiding.

We've also been considering how this thinking process is interpreting what will be priced for the Federal Reserve and the first cut. The market feels that the most likely outcome would be probably the end of summer for the first cut, and it's all about how prolonged the cutting cycle will be, whether we're going to get any front loading, and what the depth of the cuts will be. So there's a lot of active discussion, but all in all, we keep discussing the Fed, but we shouldn't forget the fact that when you look into our side of the world, EM, many, the majority, of their central banks are well into their cutting cycles and have been managing to anchor their inflation expectations, and that has been favouring the asset class. And yes, to your point, EM local currency has also been one of the beneficiaries of this very contained, and very well-perceived, development.

Duncan Wales

Yeah, I think the point you make about central banks in a lot of developing economies actually acting quicker in some cases and with greater clarity on the cutting cycle than their developed market counterparts, is definitely an advantage that we now see rolling through, even though these actions were actually taken some time ago. So, thinking about that, still lack of clarity on U.S. pay trade policy that feels like, as you say, one of the biggest, if not the biggest, risk to EM, despite the lack of correlation. But what do you think about a potentially weaker dollar for a long period of time? The dollar tends to go in big waves. It obviously has moments of volatility. But if we think about having just been on a very strong 13-year run, are we now looking at another decade of a weaker dollar? And if so, what do we think the implications of that might be?

Elina Theodorakopoulou [17:15]

It really depends how you see the world. And you're asking me this question at a point when the dollar is almost more than 10% lower when you look at the DXY. So yeah, it's a very interesting one. But yes, certainly there are reasons, and there are certain ways that you can think about why there might perhaps be a more prolonged move lower for the dollar.

We just discussed U.S. growth and the way that we're thinking about it. Not just us, but the marketplace was all about U.S. exceptionalism, whatever that means in terms of growth differentials. But there has been some sensitivity when it comes to the slowdown that we have been seeing from a data point of view. So, you might have an element of erosion of this key theme of U.S. exceptionalism. There's also the whole idea about where the big, beautiful bill will take us when it comes to fiscal and trade deficits. We are discussing the big, beautiful bill from a fiscal point of view. We're also discussing the global trade renegotiations. So that in itself, if it leads us a reduction in the fiscal and current account deficit, will also play to the idea of a prolonged move lower for the dollar.

And there is also the world outside of the U.S., because we do have places in this world that keep growing. In relative terms, they keep growing at a much stronger pace than we see in the U.S. or other developed markets. And that in itself creates a positive growth differential that—in Macro 101—will probably mean that you're going to have your dollar moving one way. But the biggest question, and the elephant in the room, is always how we think about the world when a big external shock comes, like we had few weeks ago, and if there is a full-blown escalation. So, coming from that angle, I don't think that we should think of it as either an opportunity or not an opportunity, more as an opportunity to think, and challenge whether all of a sudden, the dollar is going to stop being the reserve currency of the world.

It probably won't happen in our lifetimes or during our investment horizons, for long term-investors. But certainly, what we can do is more actively discuss it, and think about how we can manifest that through our portfolio and allocations, in a complementary allocation, in the sense of diversifying through other currencies in the spotlight that have more issuance. For example, on our side of the world this year, we’ve been seeing a flare in euro issuance. Hard currency is there, dollar issuance is there, but at the same time it doesn't stop issuance in other currencies, assuming that fits issuers' liability needs. The issuance outside of the USD is still obviously very prevalent. But we have been thinking euros, we have been thinking Japanese yen. We have been thinking Swiss francs, in local currency of course, because the evolution of the asset class and the depth and breadth of local markets do allow that.

So, perhaps there's a bigger discussion than thinking about what is going to effectively overtake the dollar. I don't think this is the appropriate question. It's more about, what else could grow as the U.S. keeps its hegemony, if you like, in this world.

Duncan Wales [21:23]

I think that's exactly the way our clients have been talking to us about it, which is: The U.S. is still the world's biggest economy. The dollar is still the most reliable currency. The U.S. Treasuries market is the biggest, most liquid market in the world. It's the most accessible and is therefore a sort of natural reserve asset as well. But, there are all these other opportunities and some of the changes, economic and policy changes, have recently opened people's eyes to the possibilities outside U.S. and U.S. dollar-denominated assets into, as you say, and we've been hearing that from a few people, a lot more issuance or planned issuance, in other hard currencies, but also local currencies.

So, I think it's sort of opened people's minds to the opportunities and that diversification. You know, we've had a lot of exogenous shocks this year, but all, and I'm touching the underside of the desk here, are relatively contained in terms of the direct impact outside the economies involved. But that may not remain the case.

Elina Theodorakopoulou

Well, think about it. We've had nothing but big events, exogenous shocks for the past, I would include COVID, 5 to 5 1/2 years. And what you have found time and again, is that what you really need to have is all these idiosyncratic stories, stories that will be able to perform, and to be able to keep tracking the better growth stories. And you still have the better growth stories, or strong growth stories, within the EM.

And they're going to be able to sustain whatever is coming through the global stratosphere, whether it's U.S. policy, whether it's trade deals. Of course, no one is immune, and no one is safe when we're talking about repenting about traditional relationships with U.S. But again, you have pockets there where you can find the more insulated economies in terms of their share to GDP, and less exposure through their exports, that are more insulated, and have the ability, because of their fiscal profile and their fiscal capacity, to absorb these sorts of shocks. And yes, EM is the promised land. We do have that. I'm not saying that we can shy away from what’s happening in the world. No one can. I wish I could make that statement, but it would be unrealistic. But again, what you need is to be in a position  to find these macro stories, idiosyncratic stories, that do serve these big macro themes, whether it's from a demographics point of view, whether it's from a growth perspective, whether it’s from the transition to next generation energy policies, All of these do play out through EM, and this is why we are here, right?

Duncan Wales [24:45]

I definitely agree with that. I think all of the global investment themes can be played one way or another through EM. But you once said to me something that still resonates, which is that with those idiosyncratic stories and idiosyncratic opportunities in emerging markets, you have to do your homework. You have to really, really do the work and understand the economy and understand it in detail. And you know, not all information is symmetrical, nor is it the same, nor is it equally important. You have to understand the things that move the needle on that particular story.

Elina Theodorakopoulou

Doing your homework is the pinnacle of what we do. You need to be able to go into the details, you need to be able to understand the macro drivers at any point in time. You also need to be able, from a bottom-up approach, to see what really happens when you’re talking with companies in the country in which you’re thinking of investing, whether you express risk or actually, decide against it, because you don’t feel that you’re being compensated for the risk you're onboarding. 

So, it goes both ways. But the reality is, looking at where we are again at the half-year point, and the performance and the spread and the yield move, if someone had told you what we would have to sustain, you wouldn’t have thought that to be the result. And we can all thank the U.S. administration for April 2nd, Liberation Day, because it gave us a very nice, almost cold shower situation, where we had to wake up and realize that volatility is here to stay. And we have to learn to live with that and just make sense of the headlines in relation to the actual macro story that is moving your performance and your investments.

Duncan Wales

Yeah, very good. So, some of the challenges of the last five years that you described have actually done us a bit of a favour, done everybody a bit of a favour, in terms of thinking about dangerous exogenous shocks, thinking about policy direction, thinking about fiscal consolidation and discipline. And also, from the issuer’s point of view, thinking about what they’re issuing, the currency they’re issuing in, and what the future looks like in terms of debt sustainability, which obviously is going well.

Elina Theodorakopoulou [27:14]

I think by now we’re having to think of ourselves as geopolitical analysts, as pharmaceutical analysts, as macro analysts—what else did we have to cope with over the past few years? Quite a few things. That always takes you a little away from your comfort zone, but it also makes you realize what’s influencing sentiment and, certainly, allocation in the market.

Duncan Wales

So, emerging markets investors are like Swiss army knives. They have to be good at lots of different things at the same time.

Elina Theodorakopoulou

Certainly. And exactly because we’re talking about a lot of idiosyncratic stories, first and foremost, you always need to wear your macro hat. You need to understand what is going on. You need to know your fundamentals. So yes, certainly do your homework and then make sure that you know what you’re talking about. And then, just make sure that you also understand what’s moving the market, because sometimes it’s the macro story, sometimes it’s the sentiment. But again, that all goes back to being true to your process and do your homework. And making sure that you understand what you invest in and what risk you’re onboarding.

Duncan Wales

Yeah, absolutely. A lot of people have been having a lot of conversations recently where the oldest joke in emerging markets keeps coming up, which is, “you can win on the fundamentals and lose on the FX”. So, you have to really understand the macro as well as the bottom up.

Elina Theodorakopoulou [28:47]

The first half of the year has probably earned me a few more gray hairs than I would want. But again, this is the beauty of it, right? And it's been quite a first six months, but performance of the asset class has been astonishing. The flows are beginning to be there, which is also an extremely positive development. And we’ll just need to make sure that we keep doing what we’re doing, keep doing our homework, and then think through to what we are investing in, in terms of process. That’s what we need to do.

Duncan Wales

Yeah. And so, are you feeling broadly optimistic for H2? We've got big U.S. trade policy uncertainties coming up, but those will become a bit clearer, and we have a potentially weaker dollar for some time. We may be going to a rate cutting cycle in dollars in September and how steeply, and how many, is a different question, and you know, there is resilience and inflows in the asset class.

Elina Theodorakopoulou

It could have been worse, but that's the way in which all these big events have been morphing. But the reality is that it is a cautious approach. You need to be quite mindful of what is coming our way. Yes, if all the stars align and we get what we’re expecting and we're forecasting, it could be quite telling in terms of this year. But it doesn't come without market sensitivities. There are still a lot of unknowns. We're still talking about big structural changes. We still need to get confirmation of what is coming our way. But where we stand now, and as we have been discussing for the past half hour, the reality is that you do need to have a cautious, yet pragmatic, view of the world going forward.

So, it doesn't mean that all the tail risk has disappeared. You can perhaps assign a lower probability to it. But we do still require clarity, and we do need to have certainty about what is coming our way. We are also coming at the back of tight levels in terms of valuation. So that's something to bear in mind and naturally, that’s something that influences our views and how we see the world. But all in all, relative to where we were even 2-3 weeks ago, it feels that things are going the right direction.

Duncan Wales

Yeah, fantastic. We see a surprising amount of new issuance as well.

Elina Theodorakopoulou [31:38]

Yes, that's extremely telling of a market that’s alive and kicking, isn't it? And when you look at your issuance from a credit quality breakdown perspective, perhaps you can make the argument that more high-grade issuance has been front-loaded in the first couple of months of the year and then we went somewhat into a tilt toward high yield.

But over the past week or so, the market has been issuing. And the other telling thing is that there has been absorption from the market. Everyone was very happy to participate in coming back to the risk sentiment and it feels more euphoric relative to where we were at.

Duncan Wales

Yes, I mean, it was pretty amazing to think about the recovery in asset classes after a 12 or 13-day war, which was pretty alarming, given the protagonists involved and the circumstances.

Elina Theodorakopoulou [32:48]

Certainly, and this tail risk is certainly still there but assigning lower probability to this outcome. So yeah, all of these developments have certainly helped bring about a more euphoric stance when it comes to issuance.

Duncan Wales

Yeah, absolutely. So, you know, we are all cautiously optimistic running into H2, but with a certain amount of uncertainty, as the man once said.

Elina Theodorakopoulou

It’s always the case, isn't it?

Duncan Wales

Yeah, well, that's true. It's always the case. You know, you and I were discussing just before, that it's quite difficult to find many periods in investing life where amazing events weren't always going on. Maybe we’d come out of a very benign period up until the global financial crisis where everything was always going up. And then into a strangely growing period, in the latter aftermath. And then we ran into COVID and then the emerging markets’ series of defaults. And now we're coming out of that into two hot wars, which is very tragic and horrible, but there are little glimmers of economic and social and real-life optimism around them. And, you know, let's all hope that positive direction will continue.

Elina Theodorakopoulou

You sound even happier than me.

Duncan Wales [34:20]

I know. I don't know what's happened to me this morning.

Elina Theodorakopoulou

It must be the sunshine.

Duncan Wales

It's an outbreak of optimism. Well, I do try to be optimistic about these things. I think, you know, again, one of our mutual contacts said to me recently, "if you're not optimistic, you can't be in emerging markets". You have to think about those big themes and then tether them to the idiosyncratic stories. And if you can do that successfully, it makes you optimistic, because there are demographic advantages, there are technology advantages, there are fiscal, organizational, and maturity of institution advantages. And if I stand back and think about what we discussed right at the beginning, in terms of how much more issuance has been the reason and how much demand for new issuance there is right now, it's because issuers are better organized, have better fundamental stories behind them, and there is real investor demand for them. So, those are all optimistic signs.

Elina Theodorakopoulou [35:22]

And I would add to your very spot-on comment that Asia is also a testament to how far we have come, how the market is able to absorb the volume efficiencies. For example, we’re not running behind, in terms of historical levels, what we were seeing last year or in 2020. Certainly, there have been pockets where attributing toward these decisions on higher funding requirements has led to elevated issuance. But again, it's all about how, how well the market has been able to absorb the issuance. And yes, certainly the issuers themselves are much savvier. They are very aware of the risk. They're also very aware of how they can perform and how they can actually improve their profiles and their liabilities looking forward. So, it's quite astonishing. I think I keep using "astonishing" today in our session. But it's a beautiful day. Things are looking better. Certainly, the market sentiment is here. So, our job is to make sure that we read it the right way and, based on our homework, make the right investment decisions.

Duncan Wales

That's good. And I like the word “astonishing”. The world is astonishing and the term "emerging markets" I slightly dislike as an expression, because it consigns most of the people, most of the natural resources, most of the human and geographical potential of the earth into a little investing bucket, which feels complex and difficult. But again, if you think about the big picture, 1) it's most of us and 2) it's got all this untapped potential. And a lot of the problems that we think about in terms of everything from geopolitics to climate change actually reside in those economies doing well and doing things their own way and evolving. And that's exactly what you and your colleagues and all of us in, and connected to, emerging markets, aim to enhance and to assist with.

Elina Theodorakopoulou [37:34]

And to instill in everyone that the emerging markets world we used to think about ten, twenty years ago is not the EM that we are living and experiencing today. More mature markets, deeper markets, great depth, great breadth, and a lot of diversified opportunities. This is what they are. This is the reality nowadays.

Duncan Wales

Yeah, that is definitely true. Everybody's view of emerging markets is sort of 20 years out of date, 20 or 30 years out of date. Very good.

Well, Elina, fascinating. I could listen to you all day, but I need to let you go and wrestle with these complex markets. But thank you so much for your fascinating insight. Delightful to talk to you. And thank you for listening to the Emerging Markets podcast by Tellimer. We'll see you again next time.

Elina Theodorakopoulou

Thank you very much, Duncan, Have a lovely day.

Duncan Wales

Thank you, Elina. See you.

Investing involves risks, including the potential loss of principal. Financial markets are volatile and can fluctuate significantly in response to company, industry, political, regulatory, market, or economic developments.  These risks are magnified for investments made in emerging markets. Currency risk is the risk that fluctuations in exchange rates may adversely affect the value of a portfolio’s investments.

The information provided does not take into account the suitability, investment objectives, financial situation, or particular needs of any specific person. You should consider the suitability of any type of investment for your circumstances and, if necessary, seek professional advice.

This material is intended for the exclusive use of recipients in jurisdictions who are allowed to receive the material under their applicable law. The opinions expressed are those of the author(s) and are subject to change without notice. Our investment teams may hold different views and make different investment decisions. These opinions may not necessarily reflect the views of Manulife Investment Management or its affiliates. The information and/or analysis contained in this material has been compiled or arrived at from sources believed to be reliable, but Manulife Investment Management does not make any representation as to their accuracy, correctness, usefulness, or completeness and does not accept liability for any loss arising from the use of the information and/or analysis contained. The information in this material may contain projections or other forward-looking statements regarding future events, targets, management discipline, or other expectations, and is only current as of the date indicated. The information in this document, including statements concerning financial market trends, are based on current market conditions, which will fluctuate and may be superseded by subsequent market events or for other reasons. Manulife Investment Management disclaims any responsibility to update such information.

Neither Manulife Investment Management or its affiliates, nor any of their directors, officers or employees shall assume any liability or responsibility for any direct or indirect loss or damage or any other consequence of any person acting or not acting in reliance on the information contained here.  All overviews and commentary are intended to be general in nature and for current interest. While helpful, these overviews are no substitute for professional tax, investment or legal advice. Clients should seek professional advice for their particular situation. Neither Manulife, Manulife Investment Management, nor any of their affiliates or representatives is providing tax, investment or legal advice.  This material was prepared solely for informational purposes, does not constitute a recommendation, professional advice, an offer or an invitation by or on behalf of Manulife Investment Management to any person to buy or sell any security or adopt any investment strategy, and is no indication of trading intent in any fund or account managed by Manulife Investment Management. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. Diversification or asset allocation does not guarantee a profit or protect against the risk of loss in any market. Unless otherwise specified, all data is sourced from Manulife Investment Management. Past performance does not guarantee future results.

Manulife Investment Management

Manulife Investment Management is the global wealth and asset management segment of Manulife Financial Corporation. We draw on more than a century of financial stewardship to partner with clients across our institutional, retail, and retirement businesses globally. Our specialist approach to money management includes the highly differentiated strategies of our fixed-income, specialized equity, multi-asset solutions, and private markets teams—along with access to specialized, unaffiliated asset managers from around the world through our multimanager model.

This material has not been reviewed by, is not registered with any securities or other regulatory authority, and may, where appropriate, be distributed by the following Manulife entities in their respective jurisdictions. Additional information about Manulife Investment Management may be found at manulifeim.com/institutional

Australia: : Manulife Investment Management Timberland and Agriculture (Australasia) Pty Ltd, Manulife Investment Management (Hong Kong) Limited. Canada: Manulife Investment Management Limited, Manulife Investment Management Distributors Inc., Manulife Investment Management (North America) Limited, Manulife Investment Management Private Markets (Canada) Corp. Mainland China: Manulife Overseas Investment Fund Management (Shanghai) Limited Company. European Economic Area: Manulife Investment Management (Ireland) Ltd. which is authorised and regulated by the Central Bank of Ireland Hong Kong: Manulife Investment Management (Hong Kong) Limited. Indonesia: PT Manulife Aset Manajemen Indonesia. Japan: Manulife Investment Management (Japan) Limited. Malaysia: Manulife Investment Management (M) Berhad  200801033087 (834424-U) Philippines: Manulife Investment Management and Trust Corporation. Singapore: Manulife Investment Management (Singapore) Pte. Ltd. (Company Registration No. 200709952G) South Korea: Manulife Investment Management (Hong Kong) Limited. Switzerland: Manulife IM (Switzerland) LLC. Taiwan: Manulife Investment Management (Taiwan) Co. Ltd. United Kingdom: Manulife Investment Management (Europe) Ltd. which is authorised and regulated by the Financial Conduct Authority
United States: John Hancock Investment Management LLC, Manulife Investment Management (US) LLC, Manulife Investment Management Private Markets (US) LLC and Manulife Investment Management Timberland and Agriculture Inc. Vietnam: Manulife Investment Fund Management (Vietnam) Company Limited.

Manulife, Manulife Investment Management, Stylized M Design, and Manulife Investment Management & Stylized M Design are trademarks of The Manufacturers Life Insurance Company and are used by it, and by its affiliates under license.

4688774