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Emerging Market Local Currency Debt Potentially Offers Value

Despite a strong rally in emerging-market local-currency debt in 2016, a widening yield differential with US rates points to the long-term value of the asset class, says Liam Spillane, Head of Emerging Market Debt at Aviva Investors.

Key points
  • The asset class has rallied strongly following the lows reached in January 2016
    Stabilizing commodity prices, dollar weakness and heavy inflows from yield-hungry investors drove the upturn
  • We continue to explore opportunities for long-term investors
  • A selective approach is important given short-term risks and challenging fundamentals
  • Overall, the long-term emerging-market story remains intact

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Virtus Investment Partners provides this communication as a matter of general information. The opinions stated herein are those of the author and not necessarily the opinions of Virtus, its affiliates or its subadvisers. Portfolio managers at Virtus make investment decisions in accordance with specific client guidelines and restrictions. As a result, client accounts may differ in strategy and composition from the information presented herein. Any facts and statistics quoted are from sources believed to be reliable, but they may be incomplete or condensed and we do not guarantee their accuracy. This communication is not an offer or solicitation to purchase or sell any security, and it is not a research report. Individuals should consult with a qualified financial professional before making any investment decisions.