Is there any room for yields to fall lower in emerging markets?

Uncharacteristically immune to global risks

The flow-driven rally witnessed this year has left valuations across the board stretched and therefore vulnerable, particularly given the strong returns generated by the majority of investors in risk markets.

With most emerging market (EM) sub-asset classes up 8%-10%, so far it is difficult to see much more room for yields to head even lower. Gallery: What will frontier markets look like in 2020? The temptation is to move to a more defensive investment profile and lock in some of the profits.  But the healthy global growth backdrop, easing inflation in the key EMs and a generally cautious approach by the world's major central banks on withdrawing stimulus all add up to a supportive environment for investing in EMs.  Meanwhile, the market has been uncharacteristically immune to global...