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
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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.

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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.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Neuberger Berman EM DbtHrdCcy USD I D10.30 USD0.87Rating
Pictet-Global Emerging Debt I USD472.61 USD0.92Rating
Templeton Emerging Mkts Bd A(Qdis)USD9.02 USD0.46Rating
Vontobel Emerging Mkts Dbt N USD149.06 USD0.90Rating

About Author

Mara Dobrescu

Mara Dobrescu  is a fund analyst at Morningstar France.