The continuing low level of government bond yields has supported the search for yield that has been evident over the past couple of years, with the spread between yields on US government debt and yields on both corporate and
emerging market debt remaining around historical lows over the past three months (Box B).
Not exact matches
With lower external
debt than other regions, Asian economies have been less vulnerable to a strengthening U.S. dollar, which
remains one of the main risks to our outlook for
emerging markets.
Against this environment, our strategists
remain bullish on equities and continue to favor
emerging market currencies and, in the fixed income space, prefer local
markets over external
debt and maintain their higher - yielding yet better - quality bias.
Yield spreads between
emerging market sovereign
debt and US Treasuries have
remained relatively low over the past three months in most
markets (Graph 12).
With lower external
debt than other regions, Asian economies have been less vulnerable to a strengthening U.S. dollar, which
remains one of the main risks to our outlook for
emerging markets.
Gill will co-manage the
emerging market debt sub-portfolio with existing manager John Carlson who also
remains as lead manager of the fund.