Pictet's Lue-Fong: The 'exciting' opportunities in local currency EMD

Vietnam and LatAm looking attractive

Pictet's Simon Lue-Fong looks back over a decade of running Pictet's emerging markets local debt fund, and offers insights into where new opportunities might be opening up.

We are going through unusual times. Ten years ago, emerging debt would tend to experience violent "boom and bust" cycles. Even so, those downturns were fairly short. There would only ever be one year of decline and that would be followed by a rally. But what we are now seeing in local currency emerging debt is very different - three consecutive years of falling returns. The duration of the decline has caught out many investors who prematurely picked the bottom of this cycle and are now growing frustrated. It is important to make clear that this exceptionally long period of underperfor...