Why selectivity remains key when investing in EMD

With the global tide of the central bank stimulus injection soon to turn, only a few segments of the fixed income universe have enough spread cushion to absorb the shift to a post-QE era.

We are still convinced emerging market (EM) debt offers interesting opportunities, supported by the global cyclical pick-up, a commodity price positive environment and undeniably improving fundamentals in several emerging countries.  Why investors should not be put off by EM debtanomalies While in developed countries we are tracking inflation and expecting a rebound, we are in the opposite stage in most emerging countries with a disinflation process (Brazil, India, Indonesia and so on) allowing rate cuts by central banks.  Finally, we are confident a gradual central bank normalisin...