Already a subscriber?Growth prospects might appear to be challenging for developing economies across Asia in the midst of China’s economic slump, higher-for-longer interest rates globally and increased geopolitical tensions.
Hard currency sovereign and quasi sovereign debt – bonds issued by countries or state-owned enterprises mostly in US dollars – generally do well in “risk on” markets and stable higher-rate environments. In slowing global growth markets, hedged EM local rates can perform well, offering attractive real yields with steep curves as interest rates are taken down to boost growth. In this dynamic, a slower global market would normally strengthen the US dollar and hurt emerging market trade volume.
With these three return steams in emerging markets in mind and a better understanding of how they perform in different macro contexts, it’s important for investors to understand what proper asset allocation and portfolio construction look like.
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Source: 7NewsAustralia - 🏆 11. / 71 Read more »
Source: 7NewsAustralia - 🏆 11. / 71 Read more »