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Emerging Perspectives

Position of strength: Why EMD is an asset class to watch in 2020

5 December 2019
Authors: Peter EerdmansHead of Fixed Income and Co-Head of EM Sovereign & FX, Victoria HarlingHead of Emerging Market Corporate Debt, Wilfred WeePortfolio Manager

Emerging local currency debt: A clear agenda for change

With a busy electoral calendar now behind us, Peter reflects on the next chapter in emerging market debt.

Key takeaways:

  • An end to US monetary policy tightening removed a key headwind in 2019 and paves the way for further growth stimulus in emerging markets.
  • Most elections are now behind us, giving emerging market governments the breathing space to carry on with the important work of reforming and strengthening, while reducing the risk of negative headlines.
  • Domestic and intra-emerging market driving forces should continue to rise in prominence in this evolving and strengthening universe.
  • Just as in 2019, there will be winners and losers – selectivity remains key.

Read the full piece


EM Corporate Debt: In good company

Emerging market corporate bond issuers proved their mettle in 2019. Will 2020 be different? Victoria discusses one of the investment world’s best kept secrets.

Key takeaways:

  • We expect interest in the emerging market corporate debt asset class to continue to grow as the ongoing lower rates environment helps more investors discover what it has to offer.
  • Our defensive stance reflects in our current preference for longer duration, higher credit quality corporate bonds.
  • In high-yield markets we will continue to seek out investments that much of the broader market is overlooking, and that can take us far and wide.
  • The relative strength of many emerging market companies compared to their developed market peers should become even starker.

Read the full piece


China Bond - A pivotal year

Wilfred reflects on what looks set to be another pivotal year for Chinese bonds in their journey to the investment mainstream.

Key takeaways:

  • Flagship index inclusion from February means the move to the mainstream of Chinese bonds looks set to continue in 2020.
  • Persistent low rates in most developed markets are likely to make Chinese bonds increasingly hard for investors to ignore.
  • We think investors’ awareness of the portfolio diversification benefits of this distinctive asset class will only rise in 2020.
  • While its growth continues to moderate, China’s reaction to both this and US trade tensions speaks of a long-term vision for sustainable growth.
  • We’ll continue to take a selective approach, exploring the broadening and deepening opportunity set.

Read the full piece

 

Emerging market: These markets carry a higher risk of financial loss than more developed markets as they may have less developed legal, political, economic or other systems.


The value of investments, and any income generated from them, can fall as well as rise.

Peter Eerdmans
Peter Eerdmans Head of Fixed Income and Co-Head of EM Sovereign & FX
Victoria Harling
Victoria Harling Head of Emerging Market Corporate Debt
Wilfred Wee
Wilfred Wee Portfolio Manager

Important information

This material is for informational purposes only and should not be construed as an offer, or solicitation of an offer, to buy or sell securities. All of the views expressed about the markets, securities or companies reflect the personal views of the individual fund manager (or team) named. While opinions stated are honestly held, they are not guarantees and should not be relied on. Investec Asset Management in the normal course of its activities as an international investment manager may already hold or intend to purchase or sell the stocks mentioned on behalf of its clients. The information or opinions provided should not be taken as specific advice on the merits of any investment decision. This content may contain statements about expected or anticipated future events and financial results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, new legislation and regulatory actions, competitive and general economic factors and conditions and the occurrence of unexpected events. Actual results may differ materially from those stated herein.
All rights reserved. Issued by Investec Asset Management, issued December 2019.

The content of this page is intended for investment professionals only and should not be relied upon by anyone else

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