When Will Emerging Market Bonds Recover?

Developed market credit has performed well recently, says HSBC - but when will emerging markets catch up?

HSBC Private Bank 13 August, 2013 | 4:06PM
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This article is part of Morningstar's "Perspectives" series, written by third-party contributors. Here Esty Dwek, Investment Strategist at HSBC Private Bank, asks 'When will emerging market debt bounce?'

Emerging market assets have not recovered as quickly as developed market assets since the May correction. In our view, emerging market debt still has some hurdles to clear before we see better performance from the asset class. We believe that if Treasury yields stabilise around current levels, EM hard currency debt spreads can gradually compress, although it may take time to materialise. 

Following the sharp correction we saw across the emerging markets (EM) in May, we believe it is only fair for investors to wonder whether, and when, EM assets will recover.

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HSBC Private Bank  HSBC Private Bank provides private banking and wealth management services to high net worth individuals.

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