Most current valuations have already accounted for the uncertainty regarding the length of the recovery.
Moody’s and Fitch Ratings say that emerging market defaults are increasingly likely to hit record highs, with Asia-Pacific corporates looking particularly vulnerable.
Cathay Life and Shin Kong Life have been upping their exposure to emerging market bonds. They and Fubon Life have also generated strong returns from high-dividend stocks.
Emerging-market equities still have room to rise, but EM bonds face potential problems that could scupper their rally, says Tai Hui, the fund house’s chief market strategist for Asia.
Emerging markets-focused private equity funds strongly outperformed the public markets in the fourth quarter and last year, according to Cambridge Associates.
Distressed, event-driven and India strategies have been standout performers this year, according to eVestment's May report on hedge fund performance.