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.
- 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