Emerging Market Bonds Offer Attractive Income

Emerging market government bonds have underperformed in relation to other risky assets - is this a buying opportunity?

Mara Dobrescu 19 December, 2018 | 2:25PM

Sao Paulo Brazil emerging markets carnival debt fixed income latin america

Since the beginning of 2018, government debt has been under pressure due to the normalisation of the Federal Reserve’s balance sheet and rising rates. Debt in dollars is more attractive to investors as the dollar strengthens but weighs on the issuer’s finances as the value of their currencies falls.

The sector’s recent troubles highlight the inherent risks of investing in emerging markets government debt. Some countries have a current account and / or budget deficit and are therefore more dependent on the export of goods.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Neuberger Berman EM DbtHrdCcy USD I Inc10.56 USD0.80
Pictet-Global Emerging Debt I USD468.03 USD-0.12
Templeton Emerging Mkts Bd A(Qdis)USD10.31 USD0.31
Vontobel Emerging Mkts Dbt N USD138.15 USD0.15

About Author

Mara Dobrescu

Mara Dobrescu  is a fund analyst at Morningstar France.

Audience Confirmation


By clicking 'accept' I acknowledge that this website uses cookies and other technologies to tailor my experience and understand how I and other visitors use our site. See 'Cookie Consent' for more detail.

  • Other Morningstar Websites
© Copyright 2020 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies