The Outlook for Emerging Market Bonds: Research Affiliates

In the latest piece from Research Affiliates, Shane Shepherd, head of fixed income research, looks at emerging market bonds and how they continue to exhibit high real yields and improving credit quality. With emerging market currencies likely to strengthen, the article explains why emerging market bonds issued in local currencies might be a solid addition to a diversified portfolio.

The Outlook for Emerging Market Bonds

Emerging market sovereign bonds that are issued in local currencies are supported by high real yields and improving credit quality. In addition, their risk-to-reward profile is enhanced by declining currency volatility and a positive long-term outlook for currency appreciation. This article explains why local currency emerging market bonds are attractive relative to historical valuation levels as...