Go long local currencies to benefit from monetary tightening cycle

ON EMERGING MARKETS

COLM MCDONAGH, head of EMD at Insight Investment and manager of the Absolute Insight EMD fund on Emerging Markets

For more on emerging markets, search Adviserhound.com 2010 has so far been a year of diverse performance across emerging debt markets. Most recently, US economic weakness has been the main focus for EMD investors, as a spate of poor data led the market to worry about a ‘double-dip’. Today, there is a need for far greater discretion and a selective approach to investment. However, the strong macro­economic fundamentals of much of the asset class have justified the yield compression seen so far this year. When compared to the developed market world, most emerging market countries sta...