- Emerging-market investors including JPMorgan Asset Management are dialing back their riskiest bond bets as the selloff in global credit markets deepens.
- Dollar debt from emerging markets returned 1.4% over the past year despite turmoil that sent US Treasury yields to the highest in nearly two decades.
- Credit spreads are at their tightest since 2007 even as oil trades above $100 a barrel and investors brace for higher-for-longer global interest rates.
- Money managers warn EM bonds are bound to sell off given stretched valuations and rising global yields.
Quotes
“Emerging-market investors from Aegon USA Investment Management to JPMorgan Asset Management are dialing back their riskiest bond bets as the deepening selloff in global credit markets threatens to derail a stellar run for debt in the developing world.”
“Dollar debt from countries in the emerging world returned 1.4% over the past year despite the recent turmoil that has sent yields on US Treasuries to the highest in nearly two decades.”
“Even with oil above $100 a barrel and investors bracing for higher-for-longer global interest rates, credit spreads are at their tightest since 2007, raising alarm bells for money managers who say the bonds are bound to sell off.”