Despite these advantages, many investors remain cautious because they often don’t appreciate the full picture: EM local debt is frequently treated as a currency story when it should be seen as both a bond and FX story.
For years, the local currency debt of emerging markets (EM) has been one of the most misunderstood segments of the fixed-income market.
It can offer attractive yields, exposure to faster-growing economies than many developed markets (DM) and diversification benefits that can complement traditional fixed-income allocations.
