After a market sell-off in 2018, we believe that emerging market (EM) fixed income should perform better in 2019, thanks to sound fundamentals, reduced political risk and more favourable technicals and valuations.
1) 2018 was a volatile year for EM fixed income, due to a combination of negative global and idiosyncratic factors. Still, the relative performance of the different EMFI sub-asset classes was in line with their longerterm risk-adjusted trends.
2) The outlook for 2019 is more positive as EM and developed market growth should remain solid, EM political risk is easing, and commodities should rebound from their recent lows.
3) Market technicals and valuations also appear supportive.
4) Our EM fixed income strategies are cautiously positioned as we enter into the year end, but we are looking to gradually increase our market exposure to take advantage of this more positive outlook.
- Emerging Market Debt Outlook 2018: A Global Rebalancing is Due (Vontobel)
- Frontier Case Study: Ecuador’s Path to Economic Sustainability (PGIM Fixed Income)
- A Class Apart: Emerging Asia’s Fixed Income Market (Pictet AM)
- Emerging Markets: Blow-Up? Or Blow Over? (Goldman Sachs)
- Emerging Market Fixed Income: Characteristics of the Asset Class (FTSE Russell)
- Outlook on Emerging Markets (Lazard AM)
- Outlook On Emerging Markets (Lazard AM)
- Morgan Stanley’s Shallett: Emerging Markets Beset By Risk & Rich Valuations (Citywire)
- Asian Tigers: South Korea and Taiwan (Franklin Templeton)
- S&W’s McGrath: Emerging Markets Are at the Perfect Entry Point (FE Trustnet)
- Discern and Diversify: Asian Bonds Increasingly Sought for Better Diversification (Eastspring Investments)
- Talking Markets Podcast: Asia – Macro and Markets in 2021 (Pinebridge Investments)
- Why Two Fund Managers Still Believe in Macau Casino Stocks (FE Trustnet)
- The Fun Is Just Starting for Emerging Market Stocks (Bloomberg)
- 2018 Emerging Markets Outlook: Rally In EM Equities to Continue – Particularly for Emerging Asia (Fiera Capital)