5 Reasons to Consider EM Local Bonds

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5 Reasons to Consider EM Local Bonds

Attractive yields and cheap currencies make the sector stand out.

With investors struggling to find much‑needed yield, we believe emerging market (EM) local bonds offer attractive opportunities. The yields on offer from a number of EM local bond markets are among the highest currently available in fixed income, while EM currencies are attractively valued and look set to benefit from the U.S. dollar cycle …

Key Insights

• Emerging market (EM) currencies benefit from compelling valuations and the possibility of a turn in the U.S. dollar cycle.
• EM local bonds offer real income potential in a world of very low‑ and negative‑yielding bonds across developed markets.
• Shorter duration profile and potential inflows are also supportive for EM local bonds.