EM debt attracts investors, but correction could be due

Investor keenness in sector pushes prices up sharply but long-term case remains intact

News this month that emerging market sovereign debt became, on average, investment grade, might seem to justify the current enthusiasm from all types of investors. Their keenness has pushed prices up so far some managers suggest a correction is due, even if there remains room for prices to grow in the longer term. In the year to 11 January, funds in the IMA global bond sector, which can allocate to emerging markets, grew by 10.8%. They are up 34.5% over three years.They have been buoyed by sharp rises in debt prices. In emerging European economies, where Andrew Wilmont, manager of ...