By Mariana Santibáñez
Emerging market debt: A simple promise
A surge in demand for emerging market debt has seen investors pile into the asset class – but tight supply in Latin America could see the region overshadowed this year by Asia
Emerging market credit started the year with an unprecedented
bang. Funds piled into the asset class as new and existing
investors upped their allocations in a seemingly relentless
search for yield – as well as shelter from the global
Nowhere was the upsurge as apparent as in corporate credit,
which has proved the fastest growing part of the asset
Although debt issuance by emerging corporates has slowed
since January, inflows to the market remain robust: some $19.7
billion through August 15 was ploughed into emerging market
dedicated bond funds which includes hard currency, local
currency, sovereign and corporates in the first half of this
year, according to EPFR Global.
Persistent zero or negative real yields in the developed
world have meant that investors have flocked to emerging
markets – and debt in particular – in search
of higher yield. And the prospect that...
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