Lyubka Dushanova, Portfolio Strategist, Emerging Market Debt, outlines why investors should reassess prospects for EMD right now. Summarising what happened in EMD in 2022 and the opportunities we see for the asset class in the year ahead, Lyubka explains why we believe an indexed approach makes sense. For deeper insights see our paper below – Revisiting Emerging Market Debt: Brighter Days Ahead?
After a volatile year, emerging market debt has rallied in recent months. The recovery has not been without turbulence, but there are signs that the skies are brightening as some of the headwinds that pinned back performance have eased. We consider what investors in EM debt might expect through the rest of 2023.
EM debt posted healthy returns in a bumpy 3-month period that saw markets navigate shifting rate expectations, banking upset, and signs of peaking inflation.