July 12, 2018
Emerging Markets High Yield Update - July 2018
Markets are calming down overall after recent sell-offs. Multiple factors were driving a risk off mentality; in developed markets in Q1, in particular, uncertainty surrounding the formation of a new Italian government hit sentiment across core Europe and made developed market investors more cautious generally.
In EM specifically, upsets in Argentina and then Turkey where the lira hit historic lows sparking emergency interest rate hikes raised fears of emerging markets contagion. This prompted indiscriminate selling that has hit high quality credits along with the wider market.
In fact, we believe that these rises look now to be subsiding.
March 19, 2018
Emerging Markets Corporate High Yield - A Market That Has Come of Age?
Emerging Markets High Yield Corporate Debt is at the point where the US high yield market was 20 years ago – on the brink of widespread investor acceptance as a serious asset class. Once regarded as illiquid and exotic, the asset class is fast becoming a “must-have” component of any diversified investment portfolio, offering attractive value at acceptable levels of risk.
March 01, 2018
Emerging Markets Debt 2018 Outlook - Strong fundamentals should continue to drive EM High Yield
We remain constructive on EM Corporate High Yield (HY) due to stable fundamentals, relatively attractive yields, low default rates and potential for further spread tightening.
Nevertheless, we realise that the market may be vulnerable to increased official interest rates and the unwinding of QE. However, our base case scenario is that these factors are well-known and will continue to be implemented steadily and predictably to minimise market disruption.
We continue to be highly selective and concentrate on defensive and cash-generative sectors, such as Telecommunications.