Should investors now be turning to EM bonds for real yield?

Many investors continue to overlook the risks associated with developed market bonds at the expense of potential opportunities in emerging markets, according to Robert Simpson, portfolio manager, fixed income at Insight Investment, part of BNY Mellon.

Financial markets in the developed world have been distorted by the effects of ultra-loose policy. Against this backdrop, the value of sovereign debt yielding below zero currently stands at around $10trn and the pool of corporate bonds with negative yields has also swelled as companies such as Nestlé, Royal Dutch Shell and EDF have seen their bonds trade in negative territory on the secondary market. German 10-year bund yields move into negative territory for first time Despite this, there has been a clamour for developed market investment grade debt as investors have been prepared...