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The 2019-2023 EM Fixed Income Outlook

By Advisor Perspectives
Financial Services

Summary:

EM fixed income should deliver compounded returns ranging from 30% and 60% in Dollar terms over the 2019-2023 investment horizon as markets revert to unwinding the so-called ‘QE trades’ after a temporary US election related interruption in 2018. As for 2019 returns, they may be marginally stronger than the five-year average due to the pullback in 2018. The main EM risks will be idiosyncratic, probably election-related. By far the largest risks to global finance over the next five years emanate from developed countries due to their overvalued markets, slowing economies, policy tightening and growing populism.

Introduction

EM fixed income benchmark indices now cover 153 individual markets, making EM bonds the most diverse fixed income asset class in the world. We expect compounded returns between 30% and 60% in Dollar terms across the various themes with 2019 returns tilted slightly higher than the five-year average due the pullback in EM asset prices in 2018.

Read more at Advisor Perspectives.

Photo: sung ming whang

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