«The opportunity in
emerging market debt looks better, with many currencies having weakened significantly,» he adds.
Not exact matches
«Many investors are
looking for exposure to
emerging markets, but do not have the risk appetite for
emerging market equities or
emerging market local - currency
debt,» said Fijalkowski.
We also prefer
emerging market (EM)
debt, whose relatively higher yields now
look more attractive post Brexit given that some key headwinds to EMs have turned into tailwinds.
Within the broad EM
debt asset class, U.S. investors
looking for EM bond exposure without explicit currency risk may want to consider dollar - denominated sovereign bonds like the iShares J. P. Morgan USD
Emerging Markets Bond ETF (EMB).
With leveraged credit
looking especially full, we favor
emerging markets (EM)
debt and certain parts of the securitized
markets instead.
The portfolio manager
looks for businesses with historically high returns that are trading at cheap multiples for the Fidelity Frontier
Emerging Markets Fund, but he's also focused on companies that are funded by free cash, as opposed to
debt.
We can see this dynamic at play in the figure below, which
looks at the correlation between the amount of money flowing into risky assets (
emerging markets, high yield
debt) and the balance sheets of the four largest central banks.
If you really want print / media exposure, I would either
look to: a) a cash rich / zero
debt companies in the developed world — and hope they can churn out cash / earnings / dividends, and / or diversify their assets, or b) companies in / exposed to the
emerging markets — probably cheap also, but still offer some growth potential.
We'll
look at various bond
market categories, everything from Treasury notes to junk bonds to
emerging -
market debt.