Investing in EM corporate bonds for income and diversification

T. Rowe Price
By January 6, 2021 16:00

Investing in EM corporate bonds for income and diversification

Using credit in asset allocation 
Investing in EM corporate bonds for income and diversification 

In asset allocation, emerging market (EM) corporate bonds can be used to help investors achieve a range of objectives, in a range of market environments. In this discussion we focus on some of the characteristics EM corporates can bring to a portfolio, including:

  • A large and expanding opportunity set
  • A history of attractive returns with lower volatility than equities or high yield credit
  • A history of relative resilience during market shocks
  • A way to access emerging markets without direct exposure to EM currency risk
  • Lower interest-rate sensitivity than that of developed-market government bonds
  • A spectrum of credit profiles, with issuers ranging from risky high yield to strong investment grade
  • Potential diversification benefits when combined with developed-market assets

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T. Rowe Price
By January 6, 2021 16:00


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