Following the violent sell-off in emerging markets earlier this year, Jonathan Mann, head of emerging market debt at F&C Investments, explains what investors can expect from the asset class.
Since May, when global fixed income markets started pricing in a withdrawal of quantitative easing by the US Federal Reserve, emerging market (EM) assets have underperformed practically all other asset classes. Over the course of 2013 to the end of July, EM equity, sovereign and local currency debt indices fell by 10.2%, 6.7% and 7.7% respectively. The speed and severity of the sell-off, have been unprecedented. To put the correction into perspective, EM external sovereign debt is now on track to record one of its worst ever annual returns since the launch of the index in 1993. Prior ...
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