Luz Padilla, Director of the International Fixed Income team at DoubleLine Capital, and Global Bond Portfolio Manager, Bill Campbell discuss the global economy and bond markets outside the U.S. DoubleLine Product Specialist Chris Stegmann moderates the discussion, recorded Oct. 24, 2023. The talk begins (1:18) with China’s stronger-than-expected GDP report for the third quarter as well as Bill Campbell’s assessment of Beijing’s fiscal stimulus program. Given China’s “command-and-control economy” and Beijing’s increasing of fiscal stimulus to 3.8% of GDP, Mr. Campbell believes the risk of “a downside growth shock has been significantly reduced, at least in the near term.” Longer term, however, China, he warns, still faces the challenges of re-engineering its growth model and addressing its debt-encumbered property and local-government sectors.
As the discussion turns to Latin America (8:29), Luz Padilla cites Brazil and Mexico, the first- and second-largest economies of Latin America, as favorites for fixed income investment along with smaller weightings to Chile, Colombia and Peru. In terms of geography, Ms. Padilla’s focus favors “larger countries that have the potential to continue to migrate up the credit curve and improve their overall conditions, and then not just look at the sovereigns, but also look at the corporate sectors.” In terms of industries, she focuses on “sectors that are strategic to an economy” such as banking, utilities, oil & gas and mining, “within not just Latin America, but really, across the whole globe.”
Ms. Padilla and Mr. Campbell also discuss FX and local currency-denominated bonds (11:26); relative valuations and spreads within the emerging markets debt universe (16:23); the yen, the Bank of Japan and its “coy” and “cagey” Governor, Kazuo Ueda (20:14); and net financing flows for emerging markets corporate bond issuers (27:28).
Ms. Padilla joined DoubleLine in 2009 as the Director of the Emerging Markets Fixed Income team and is the lead Portfolio Manager. In addition, she is a permanent member of the Fixed Income Asset Allocation Committee. Prior to DoubleLine, Ms. Padilla was a Managing Director at TCW. She began working at TCW in 1994, where she served in a number of roles including Credit Analyst, Director of Research, Co-Portfolio Manager, and lead Portfolio Manager. Ms. Padilla was involved in all aspects of building and managing TCW’s Emerging Markets Fixed Income business including credit, securitization, trading and marketing. She holds a B.A. in Economics from Stanford University and MBA from the University of California, Berkeley, as a fellow of the Robert A. Toigo Foundation.
Mr. Campbell joined DoubleLine in 2013. He is a Portfolio Manager for the DoubleLine Global Bond Strategy and is a permanent member of the Fixed Income Asset Allocation Committee. He covers Developed Markets, Central & Eastern Europe, Middle East and Africa (CEEMEA), and China. Prior to DoubleLine, Mr. Campbell worked for Peridiem Global Investors as a Global Fixed Income Research Analyst and Portfolio Manager. Previous to that, he was with Nuveen Investment Management Company, first as a Quantitative Analyst in their Risk Management and Portfolio Construction Group, then as a Vice President in their Taxable Fixed Income Group. Mr. Campbell also worked at John Hancock Financial as an Investment Analyst. He holds a BS in Business Economics and International Business, as well as a BA in English, from Pennsylvania State University. Mr. Campbell holds an MA in Mathematics, with a focus on Mathematical Finance, from Boston University.
