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Outlook for Emerging Markets Corporate Bonds: Why now?

30 October 2024
    Download the full reportPDF, 1.72MB

    Key highlights:

    Now that Emerging Markets Debt has recovered from the post-COVID drawdown, what comes next?

    With a decade-high bond yields, falling inflation, and central bank rate cuts, we are entering a promising environment for the asset class.

    We find that EM Corporates are especially attractive for long-term investors.

    We base our view on three main factors that should be supportive:

    • the peak of Federal Reserve policy and the global interest rate cycle should prove favorable for higher yielding fixed income asset classes
    • improvements in emerging markets governance and financial conditions are positive for bottom-up investment stories ahead
    • we believe the relative attractiveness of EM corporate bonds in terms of fundamentals and technical factors represents a compelling investment opportunity