Financial Professionals


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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