Edward Harrold and Jeremy Cunningham, esteemed Fixed Income Investment Directors, delve into the fascinating realm of emerging market debt (EMD) in their report titled "Local currency EMD – Why it might be time to reconsider an active allocation". At its
"Hard and local currency bonds provide different routes to returns" elucidates the distinct attributes and benefits of emerging market (EM) bonds. This asset class presents two primary investment avenues: hard currency-denominated bonds and local currency-denominated bonds. Emerging market hard currency
Essay on Unlocking Income Opportunities The main theme of the text emphasizes the burgeoning income opportunities in the fixed income sector, especially amidst the prevailing market volatility and uncertain economic environment. Elevated bond yields offer potential for higher income, acting
Global Markets and Resilient Income Streams The document, "Go global for higher income opportunities", dives deep into the increasing value of incorporating global income streams as traditional income avenues face disruptions. Edward Harrold, the Investment Director, paints a picture of
In the face of global economic unpredictability, bond investments have emerged as potential shields against market volatility. The present landscape showcases enticing opportunities in credit markets with starting yields ranging from 5.5% to 8.5%, hinting at promising long-term returns. The
A Dive into Collaborations and Market Dynamics The IFC and Amundi's partnership remains at the forefront of championing the growth and integration of green bonds in emerging markets. Despite facing an unstable global economic environment and experiencing the first-ever annual
Aegon AM's outlook suggests a potential mild recession in the US by this year's end, with critical indicators such as the yield curve and the ISM manufacturing PMI portraying caution. While inflation persists, sovereign bond yields feel the upward push.
Is the long-term case for emerging market debt still intact? The article discusses the state of emerging market (EM) debt amid current macroeconomic conditions. Key points are the strong fundamentals in major EM countries and the undervalued exchange rates in
The article, "EM rate cuts on the horizon as inflation trends down", discusses the shifting monetary policy dynamics in emerging markets (EM). In the first half of the article, the primary focus is on the decline in headline inflation in
Central banks in developed markets (DMs), led by Federal Reserve and the European Central Bank, are tightening their monetary policies due to persistent inflation. Notable in their strategy is an inclination towards short-dated bonds and emerging market (EM) debt. These
In the original paper, "Emerging markets debt focus: Turkey", the political and economic situation in Turkey leading up to the upcoming runoff election on May 28 is analyzed. Investors' hope that Recept Tayyip Erdogan would lose power has dwindled following
T. Rowe Price's "Foundations of Emerging Markets Bond Investing – Four-part anchoring framework fundamental to debt sustainability" offers an in-depth country-specific analysis of debt sustainability. This study is distinguished by its focus on four interrelated components that play a critical
In Capital Group's text, the key highlights of Q1 2023 are discussed, focusing on the resilience of Emerging Market (EM) debt despite banking sector volatility. This resilience was driven by investors paying attention to macroeconomic tailwinds from China's reopening, robust
Is the long-term case for emerging market debt still intact? In this research paper, Kirstie Spence discusses the outlook for emerging market debt and how it has been impacted by the global economic backdrop. She emphasizes that despite the current
How Vulnerable is EM Debt to Volatility Spillovers? – Investment Insights This report discusses the recent shocks to the banking system and their impact on emerging market (EM) debt. The report provides insights into two types of EM debt: EM
Investing in Emerging Market Debt: Benefits of an Active Approach Emerging market debt (EMD) is becoming more popular among investors due to its increased liquidity and diversified ownership base. Despite a challenging 2022, active research-based approaches can help identify attractive
At the beginning of the year, the three major factors driving emerging market (EM) debt were US financial conditions, the dollar and global growth. All three factors look likely to have been changed by the current shock to the banking
The recent shocks to the banking system have cast uncertainty over emerging market (EM) debt. However, despite the high number of distressed EM countries, which are usually smaller and carry idiosyncratic risks, major EMs still seem to possess strong fundamentals
Five perspectives on ESG in bond investing: Views from our fixed income team Equity investors are often associated with ESG-related discussions and considerations. Bond investors can also have unique and valuable perspectives on ESG matters. Bond investors have access to
Strong and largely unanticipated macro shocks dominated global markets in 2022, negatively impacting investor returns across a wide range of …
Key takeaways Global factors weighing on emerging market debt in 2022 look likely to continue in 2023, but high starting yields within EM local currency debt could help offset subsequent price volatility, while negative outcomes appear to be priced in
The global environment led to sharp outflows from EM debt markets in 2022. The rise in US interest rates (and increase in EM inflation), combined with the increase in general risk premium, reduced the relative attractiveness of EM debt …
Below are some takeaways by Capital Group’s emerging market sovereign debt analyst Thomas Kontchou on important economic and policy considerations given the leftist candidate Luiz Inácio Lula da Silva’s victory in Brazil’s presidential election. The leftist Workers’ Party candidate Luiz
The macroeconomic backdrop, and regime shift, created a challenging environment for EM assets in 2022. Slowing economic growth, accelerating inflation, exacerbated by Russia’s invasion of Ukraine, and tighter global financial conditions were all headwinds. EM local and dollar debt both
The macroeconomic backdrop, and regime shift, created a challenging environment for EM assets in 2022. Slowing economic growth, accelerating inflation, exacerbated by Russia’s invasion of Ukraine, and tighter global financial conditions were all headwinds. EM local and dollar debt both
Obligaties uit opkomende markten bieden enkele van de aantrekkelijkste rendementen ten opzichte van risico sinds vele jaren, vooral in het licht van de sterke fundamentals van bedrijven en de economie. Professionele beleggers zeggen al lachend dat het VK een opkomende
Below are some takeaways by Capital Group’s emerging market sovereign debt analyst Thomas Kontchou on important economic and policy considerations given the leftist candidate Luiz Inácio Lula da Silva’s victory in Brazil’s presidential election.
Praten over thema's als onderwijs of gezondheidszorg met overheden maakt deel uit van onze fiduciaire plicht – en helpt ons een holistische visie te vormen op de landen waarin we beleggen, zegt Mary-Therese Barton, Head of Emerging Market Debt.
It has been an unrelenting year of negative headlines, with a war in Ukraine, inflation concerns and recession fears jolting investors into a frenzy. Capital Group Investment Director David Cheng sat down with Portfolio Manager Luis Freitas de Oliveira to
Emerging market debt (EMD) has already broadened and deepened significantly in the last few decades and as the asset class has developed, it has become more appealing to a broader investor base. Issuance has increased, thereby improving liquidity. Yield curves
Emerging market (EM) bonds are a strategic holding for many investors. But the desired result from an allocation to emerging market debt cannot be achieved without first considering the attributes of hard- and local currency-denominated bonds — the two broad
Stijgende wereldwijde rentes en volatiele markten hebben zwaar gewogen op zowel het aanbod van als de vraag naar obligaties, vooral in opkomende markten (EM). Toch bleef één segment verrassend veerkrachtig. Uit onderzoek van Pictet Asset Management blijkt dat obligaties die
Summary Hard currency emerging market debt (EMD): – Valuations vary: 1. The spreads of investment grade (IG) sovereign and IG corporate indices are close to their historical medians. High yield (HY) corporate index spreads have inched slightly above the historical
In this Q&A, Kirstie Spence and Robert Burgess share their views on Russia, commodity prices and the impact of the conflict on emerging markets. How does the Russia-Ukraine conflict compare to previous periods of geopolitical instability? Kirstie: The current situation
Moderating global growth as policymakers grapple with persistent inflation Global economic growth looks likely to continue in 2022, albeit at a more modest pace. The COVID-19 pandemic does, however, add uncertainty to the outlook, as evidenced by the recent emergence
Higher inflation and in some cases, rising inflation expectations, have been a key focus for investors this year, in both emerging and developed markets (DM). This is against a backdrop of large fiscal and monetary stimulus from governments around the
Russia’s military aggression against Ukraine, which has become Europe’s largest ground war in generations, has impacted millions of people and triggered a large-scale humanitarian crisis as vulnerable Ukrainians take shelter or flee their homes. The intensification and spread of the
Emerging market debt (in USD terms) experienced a tepid start to 2022 as a sell-off in US Treasuries put pressure on a range of risk assets. This included EM local rates, depressing both local and hard currency returns. Concerns around
Emerging market debt (in USD terms) experienced a tepid start to 2022 as a sell-off in US Treasuries put pressure on a range of risk assets. This included EM local rates, depressing both local and hard currency returns. Concerns around
Emerging market debt (in USD terms) experienced a tepid start to 2022 as a sell-off in US Treasuries put pressure on a range of risk assets. This included EM local rates, depressing both local and hard currency returns. Concerns around
Fixed Income Perspectives Bond Market Outlook Global Rates: Yields to edge higher driven by ongoing inflation worries and 2022 rate-hike expectations Global Currencies: U.S. dollar to remain range-bound as market balances global Covid concerns, hawkish central bank policies Investment Grade:
5 investment solutions Emerging markets (EM) never fail to present a challenging and diverse investment landscape. While there are always opportunities for alpha generation, not all investment strategies pursue approaches that are likely to be fruitful in today’s climate. Here
“The hawkish December FOMC minutes released in early January suggested rate hikes ‘sooner or at a faster pace’ than previously expected, while also raising forecasted inflation to 2.6% in 2022 — an increase over the 2.2% projected last September. There
Valuations vary 1. Investment grade (IG) sovereign and corporate spreads are well below historical medians 2. High yield (HY) spreads offer more value, especially in sovereign EMD where the dispersion between countries has increased
Uncommon truths It is time to forget central scenarios and think about improbable but possible outcomes. Market sentiment is now mixed (thanks to the Fed), so our list of surprises contains something for everybody (these hypothetical predictions are our views
Macro / government bonds All three major central banks making decisions last week have demonstrated that they no longer regard the downside risks to economic activity over the coming months as outweighing the need to address inflation pressure.
Positive but slower global growth is meeting with greater inflation pressures The global economy maintained its Growth potential is on track to outpace pre-pandemic times positive overall trajectory, though economic indicators grew more mixed. Returns across fixed income were mostly
US FIXED INCOME 2022 OUTLOOK That’s how the 2022 economic forecasts feel when compared to 2021. For ’22, we see real growth running about 4%, or two times trend. That’s typically great performance, but when you’re coming off a phenomenal
In recent years we’ve seen a surge of interest in exchange traded funds (ETFs) as a cost efficient and effective way to try and replicate market index performance. But are ETFs as effective as investors think? As part of our
Executive Summary Improved access for foreign investors to China’s large bond market has started a conversation around the place of Chinese bonds within a global portfolio. Investors are now evaluating whether to make an allocation and, if they do, what
