EMCB - Rising Titans: The Allure Of Emerging Market Corporates

2024-03-16 01:30:00 ET

Summary

• In 2023, a dominant theme for markets was the return of income in fixed income.
• Fast-forward to 2024, and despite a significant rally in spreads and a fall in yields during the fourth quarter, we believe this theme is still alive and well.
• EMCB is positioned with an over-weight (relative to the JPMorgan CEMBI Diversified Index) to Latin America and an under-weight to Africa and select countries in Asia, most notably China.

By Behnood Noei, CFA

In 2023, a dominant theme for markets was the return of income in fixed income. Fast-forward to 2024, and despite a significant rally in spreads and a fall in yields during the fourth quarter, we believe this theme is still alive and well. As a matter of fact, yields of U.S. high-yield and investment-grade corporates still rest in the top quintile and decile of levels experienced over the last 10 years....

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