Multi-asset managers trade high yield for EMD

Multi-asset managers have begun to add exposure to emerging market debt (EMD) after yields on dollar-denominated debt rose above those on junk bonds for the first time since 2005.

Legal & General IM’s Justin Onuekwusi and Henderson’s  multi-asset team have been adding to dollar-denominated EMD in recent weeks after a shift in relative valuations. Barings’ Andrew Cole has increased exposure to local currency debt, meanwhile, in the belief FX risk is now worth taking. Emerging market debt saw a dramatic sell-off last year as the US announced the planned tapering of its QE programme and capital inflows into emerging markets declined. But investor interest has begun to return, as iShares ETF data shows. James de Bunsen, part of Bill McQuaker’s multi-asset team a...