Over the past decade a bellwether for risk appetite has emerged within the fixed income world: emerging markets corporate debt. Here are a few facts you should probably know about this asset class:
- It is approximately twice the size of the emerging markets sovereign external debt universe.
- It is 70% investment grade.
- Dedicated assets under management in the space are a fraction of the assets in either sovereign external or local debt.
- Crossover demand has heightened volatility in the asset class. As more dedicated funds emerge, this effect may continue to diminish.
EM corporate debt has recovered about one-half of the underperformance versus US corporate debt it began experiencing when taper talk commenced last year
All data as of 10 June 2014. Source: Merrill Lynch
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