Dangers may lurk in the shadows of the emerging market bonds boom

In recent times, emerging market bonds have been the hottest game in town. While stocks have slumped over the past three years, many emerging market bond funds have appreciated by as much as 30%. In the first two months of this year, this sector attracted around $400m new subscriptions in the US. That is triple the amount at this time last year, according to a recent survey of 200 funds managing some $9bn. I am a great fan of emerging market bonds. I have personally bought one 5% Sterling government bond issued by China and another by Russia, as well as a 3% undated Frank bond issued...