With its lower volatility and higher recovery rates, emerging market debt has been a far better bet than equities, a situation that looks set to continue as these nations develop further
Within emerging markets, debt has outperformed equity markets over the past 13 years. Macroeconomic improvements in the emerging markets regions have helped to increase debt returns, produce higher coupons and reduce its volatility level. Investors have also been attracted to this asset class as it is transparent and they can invest in it through hard currencies, which reduces the risk. Debt has proven a much more attractive way to participate in the overall macro improvement seen in a number of developing countries, as emerging market government bonds have generally traded as a proxy for ...
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