Experts from BlackRock’s Emerging Market Debt (EMD) team met on Wednesday 5 October to discuss the potential and risks of EMD investment today. To sum up:
- Prospects for EMD remain positive in light of the higher yields they offer, augmented by the ‘virtuous circle’ generated by improving fundamentals, with commodity prices trading in a more solid range and EM growth improving.
- Even though duration risk was increasing, EMD can still deliver strong returns so long as investors were selective and focused on their overall duration risk.
- Both hard and local currency EM assets have performed strongly year to date and there remains higher potential for alpha and capital appreciation from local currency debt.
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