Slides from the DoubleLine Emerging Markets Fixed Income Fund webcast titled, “Let’s Get Fiscal”

DoubleLine Emerging Markets Fixed Income Fund

Emerging Markets Risks We Saw in May 2016

  • Global Growth Slowdown
    • China
  • Political Risk
    • Brazil, Venezuela, Turkey
  • Potential for Rising U.S. Treasury Yields
  • Potential for Continued Commodity Price Declines

China Growth Has Stabilized

DoubleLine Emerging Markets Fixed Income Fund

Chinese Reserves Have Stabilized

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DoubleLine Emerging Markets Fixed Income Fund

Political Risks We Saw in May 2016

  • Brazil
    • Political uncertainty was reduced after President Dilma Rousseff was formally impeached
    • The new Temer administration has shown a commitment to a fiscal reform
  • Venezuela
    • Uncertainty over a political transition of power and the government’s ability to continue servicing its debt remains
    • Contagion risk from a Venezuela default remains small
  • Turkey
    • The failed coup attempt allowed President Erdogan to consolidate power and crackdown on the government’s political opponents
    • Moody’s downgraded Turkey’s Baa3 rating to Ba1, citing erosion of institutional strength and sizeable external funding requirements
    • Contagion risk from Turkey capital outflows remains modest

10 year UST Yields Range-Bound

DoubleLine Emerging Markets Fixed Income Fund

Commodity Appear to Have Stabilized

DoubleLine Emerging Markets Fixed Income Fund

EM Index Returns Year To Date to September 30, 2016

DoubleLine Emerging Markets Fixed Income Fund

Monetary to Fiscal Policy

Central Bank Policy

DoubleLine Emerging Markets Fixed Income Fund

Central Banks Have Expanded Their Balance Sheets

DoubleLine Emerging Markets Fixed Income Fund

Despite Central Bank Monetary Easing, Growth has Fallen Short of Expectations

DoubleLine Emerging Markets Fixed Income Fund

Rise in Populism: Higher Fiscal Spending and the Rejection of Globalization

DoubleLine Emerging Markets Fixed Income Fund

Fiscal Room?

DoubleLine Emerging Markets Fixed Income Fund

Fiscal (Political) Feasibility

DoubleLine Emerging Markets Fixed Income Fund

Fading Fiscal Drags Should Help Support Growth

DoubleLine Emerging Markets Fixed Income Fund

The Type and Composition of Fiscal Policy Matters

DoubleLine Emerging Markets Fixed Income Fund

“Investment has the highest multiplier, followed by government wages and purchases”

“Corporate and personal income taxes have the most negative effects on GDP”

Large Public Debt Stocks Will Likely Increase with Fiscal Stimulus

DoubleLine Emerging Markets Fixed Income Fund

Emerging Markets Adjusting to Policy Shifts

Structural Reformers

Stability at risk

  • South Africa
  • Turkey
  • Venezuela
  • Ecuador

Adjusting to Macro Stability

  • Argentina
  • Brazil
  • Colombia
  • Russia

Structural Reformers

  • Indonesia
  • India
  • Mexico
  • Peru

See the full slides below.

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