The “most hated asset class of the last few years” will be the best performer in 2016, argues Jan Dehn, head of research at UK fund house Ashmore.
Emerging markets will offer relative value opportunities next year, yet investors should also be mindful of derisking as the credit cycle nears its end, hears an AsianInvestor forum.
They identify three obstacles to a pick-up in liquid e-trading of EM fixed income in the secondary market, and suspect only consolidation among providers can offer a solution.
Middle Eastern institutions are among those looking more closely at emerging market fixed income as they seek higher yields, says Steve Cook of PineBridge Investments.
The UK bank aims to offer liquid exposure to local-currency emerging-market debt as demand steadily rises for the asset class.
Hedge funds, urged by banks to buy big into EM debt ahead of Japanese institutions, were left high and dry, says the UK fund house's co-head of research.
Junk bonds may offer attractive returns relative to sovereign debt, but both asset classes are at record low yields. Are investors taking sufficient note of fundamentals?
The change, set to be announced in early 2013, will aim to keep the bank's widely used EM bond indices in line with debt market development.
For many insurance companies, pension funds and banks, the need to diversify bond portfolios abroad is understood, but few seem prepared to act.
Amy Cho, Asia-Pacific business development head at Pictet Asset Management, discusses how interest in local- and hard-currency EM debt is gaining critical mass.