From cyclical booms to structural strength
Opportunities are still emerging in the emerging market debt (EMD) market even after five strong years, with low-yield spreads, strong fund inflows and heavy debt issuance - as in1997. Do current EMD valuations reflect a similar bubble or are we facing a structural change in the asset class that justifies the current level? Should we anticipate another wave of tightening?
At AXA Investment Managers, we believe the EMD market is more attractive now than in 1997, but potential pitfalls still exist that should be considered. We also believe that analysing EMD sovereign debt is extremely important and a long/short EMD investment approach should be most beneficial in the current environment.
more attractive than in 1997
A number of factors support our view that EMD is a more attractive investment now than in 1997. One key reason stems from a major shift in exchange rate
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