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The End of an EM Asset Class?
What's wrong with local debt? EM local debt markets have steadily lost foreign share over the past decade, while equity positioning has been far more stable. What's going on?
Part of the answer is the inherent bias against local debt returns in EM given structural gaps between interest rates and nominal growth, gaps that become much more evident during periods of global malaise - and part of the answer is the fact that EM also has much fatter "extreme" tail risks than equities.
Unfortunately, we don't necessarily see a reversal of the fading trend ahead, given our expectations for weak DM growth, flat or falling commodity prices and continued positive real global rates ahead.
However, we also don't believe the asset class is "on the way out" completely and continue to find plenty of value in individual EM markets.
The End of an EM Asset Class? (2025 Update)
Corporate Chartbook
Our semi-annual guide to EM listed corporate trends by charts and data.
EM Corporate Charbook (2022 Edition)How To Think About Emerging Markets (2024 Edition)
An opinionated guide to emerging markets
What is an Emerging Market? (How to Think About Emerging Markets 2024 Edition, Part 1)What's Wrong with EM? (How to Think About Emerging Markets 2024 Edition, Part 2)
Who Makes It, Who Doesn't (How to Think About Emerging Markets 2024 Edition, Part 3)
Is Globalization Over? (How to Think About Emerging Markets 2024 Edition, Part 4)
Four Big Growth Fallacies (How to Think About Emerging Markets 2024 Edition, Part 5)
An Austrian Primer: Savings, Debt and Default (How to Think About Emerging Markets 2024 Edition, Part 6)
Life After China (How to Think About Emerging Markets 2024 Edition, Part 7)
Macro and EM Equities (How to Think About Emerging Markets 2024 Edition, Part 8)
Macro and EM Debt (How to Think About Emerging Markets 2024 Edition, Part 9)
Macro and EM Currencies (How to Think About Emerging Markets 2024 Edition, Part 10)
How To Think About China (2025 Edition)
... and an opinionated guide to China
Property Boom and Property Bust (How to Think About China 2025 Edition, Part 4)Debt, Banks and the Budget (How to Think About China 2025 Edition, Part 5)
The Future of the Renminbi and the Closing of China (How to Think About China 2025 Edition, Part 6)
The Aging Crisis (How to Think About China 2025 Edition, Part 7)
How to Follow Macro Policy (How to Think About China 2025 Edition, Part 8)