Indonesia, Mexico and Peru: three long-term trades for EMD portfolios

Which currencies should EMD investors hold in their portfolios?

Liam Spillane, head of emerging market debt at Aviva Investors, looks at three long-term trade ideas for investors looking for emerging market debt exposure in their portfolios.

Valuations of emerging market (EM) currencies, equities and bonds look attractive relative to developed markets, but selectivity is key in markets which are diverse and where risk and returns tend to be dispersed. Below, Spillane looks at the three countries whose currencies offer investment potential on a long-term basis. Long local currency Indonesian government bonds  Indonesia benefits from steadily improving economic fundamentals - growth is stable above 5% while inflation remains close to the midpoint of the central bank's target band - coupled with a reform minded government....