Profiting from ultra-low interest rates - Mexican bonds

Currencies tend to provide bulk of EM debt returns

clock • 4 min read

Completing the short series from the Baring Multi-Asset Group on opportunities in the current ultra-low interest rate environment, Christopher Mahon (pictured) argues that Mexican bonds offer the best risk-return potential in the emerging market debt space

Investors have been left scratching their heads this summer as yields reached all-time lows. For UK investors, this has been brought home by the Bank of England joining those central banks - including the European Central Bank and the Bank of Japan - in easing monetary policy. With yields on 10-year gilts hitting 0.5%, developed market government bonds appear increasingly ‘yield-free'. Back in January 2014, the US 10-year note yielded 3%, and the typical emerging market bond yielded just below 6%. Since then, US Treasuries and emerging market bonds have seen 150 basis points (bps) and 90...

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