What impact will interest rate hikes have on EMD?

Emerging market debt has held up relatively well during the recent turbulent financial market environment.

This bears testament to the strong investment case that can be made for the asset class. The troubles in the eurozone relating to sovereign debt remain a concern and have led to the possibility of the global economy tipping into a double-dip recession scenario, whereby growth rates turn negative once again and the prices of risk assets fall. This is very much a worst-case scenario, with the most likely outcome being a drawn out period of slow growth. Emerging markets, on the other hand, look likely to experience much healthier economic expansion as they are less burdened by the excess...