Time to reconsider EMD?

ON BONDS

As yields on German, US and other ‘safe haven' sovereign fixed income assets remain subdued, there are other fixed income classes which continue to display attractive income-generating qualities.

While growth forecasts continue to be revised downwards across Europe and North America, one area where we continue to see strong signs of economic activity is the emerging world, where the International Monetary Fund forecasts growth of 6.1% over 2012, compared to growth of just 1.9% across the developed world. The emerging local currency debt market has grown significantly, driven by the ever expanding funding needs of regional governments and corporations. A marked increase in issuance means that the total investible universe for emerging market debt now stands around $2tn, with local...