Emerging Market Debt

Positive outlook and diversification benefits

Over the last decade the emerging market debt universe has grown rapidly and is becoming more important to a wide range of investors:

Why Emerging Market Debt?

Improving credit quality has led to greater liquidity: many emerging market countries have implemented sound fiscal and monetary policies. The result of this is a structural improvement in creditworthiness and a reduction in the historically high volatility of the asset class.

Significant diversification benefits: emerging market debt offers low correlation to developed markets and emerging market equities suggesting it has a valuable role to play in portfolio diversification.

Attractive and diversified yields: with developed market interest rates at near zero levels, Emerging Market Debt offers compelling income opportunities.

Currency appreciation: Emerging Market Local Currency Debt offers significant opportunities for currency (and therefore capital) appreciation.

Positive outlook: emerging markets’ long-term growth expectations are supported by solid fundamentals including:

• Positive demographics
• Economic reform
• Improving governance
• Increasing industrialisation

Attractive yields and strong credit quality