Emerging-market bonds have surprised analysts by being the best-performing global debt in 2021.
Emerging-market bonds were supposed to be dragged down this year as central banks moved toward withdrawing stimulus. Instead, the best-performing global debt was all from developing nations.
They alone managed to shrug off the biggest annual jump in US Treasury yields since 2013, a shock that was powerful enough to upend currency carry trades and emerging-market stocks.AP A deeper look into 2021 performance shows the top performers have mostly fallen in price, but coupon returns were high enough to offset these losses.Emerging-market bonds as a whole have dropped 1.3 per cent in 2021, a separate Bloomberg index shows. That is still far better than they did during the so-called taper tantrum of 2013, when the Fed’s signal it would cut asset purchases saw them decline 3.
“Investing in select emerging-market bonds may be a preferential way to achieve this, rather than lengthening duration or going down the credit curve.”
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