(Bloomberg) — The steep decline in developing-nation debt earlier this year has created an opening for investors to scoop up notes with low default risk on the cheap, according to a top Vanguard Group Inc. money manager.

Dan Shaykevich, the firm’s co-head of emerging-market and sovereign bonds, has bought into a rebound in those securities since March, when the intensifying Covid-19 outbreak spurred the worst selloff since the 2008 financial crisis.

“For an active manager, you cannot ask for a better market because there have been so many opportunities,” Shaykevich said in an interview. “You had some very high-quality assets trading at some very distressed levels.”

The Malvern, Pennsylvania-based firm is shifting its stance toward relative value and is particularly keen on Ukraine, Indonesia and Panama, where Shaykevich says the bonds got beaten down too far. He also snapped up debt from Ecuador and Sri Lanka, betting the nations will avoid defaults and offer higher recovery values. Their dollar notes have returned about 47% and 16% respectively in the second-quarter, trouncing the emerging-market benchmark bond index, according to data compiled by Bloomberg.

The $597 million Vanguard Emerging Markets Bond Fund, which Shaykevich helps oversee, has topped 99% of peers over the past three years with an annualized return of 8.5%, the data show. It also ranks in the 93rd percentile in 2020 with a total return of 4.2%, even as most portfolios suffer losses and as some competitors pile more cash into money-market funds.

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While Shaykevich doesn’t expect assets to recover to pre-Covid levels anytime soon, he said there’s room for some notes to rebound further. For instance, bonds from emerging-market exporters and paper-and-pulp companies, which benefit from increased demand for packaging materials, also look attractive, he said. His firm also bought new bonds from higher-rated developing nations including Abu Dhabi and Israel.

“The level of financing needs for emerging-market governments remains very high,” Shaykevich said. “That is going to ultimately benefit investors in emerging markets because countries will have to continue to offer concessions in order to access the markets to fund these gaps.”