Editorial


EMERGING MARKET DEBT


CONTENTS


P4 : Emerging market debt in figures The market in six numbers


What’s not to like about emerging markets? They have an abundant and predominantly young workforce, while the middle class is growing and so is their desire for goods and services. They are also benefiting from rising commodity prices as they are net exporters of raw materials.


The result is that developing nations are the engine room of the global economy, producing most of its growth. So lending money to emerging market governments and corporates is an attractive option, especially at a time of prolonged low yields in developed nations. Indeed, 80% of debt raised globally last year was handed to borrowers in developing economies. Yet those investing in the emerging world need to be prepared for a bumpy ride.


China is having problems, especially in its property market, which accounts for a fifth of GDP. There is war in Ukraine and many emerg- ing economies are struggling to recover from the pandemic. Then we have inflation, which is good for those selling oil, wheat and copper to other countries, but many emerging economies import their energy. All of these factors have spooked investors leading to $50bn (£40.7bn) being pulled from emerging market bond funds in the first half of 2022.


The question is, are investors right to ditch their exposures on the back of negative headlines or should they stay and hunt down the bor- rowers who will ride these storms out to influence global growth for many years to come?


The following pages of this supplement examine an asset class that continues to grow in importance for investors needing income and diversification, despite an uncertain outlook.


Mark Dunne Editor


m.dunne@portfolio-institutional.co.uk


P5: The participants An introduction to the professionals taking part in our roundtable


P6-19: The discussion


A transcript of our debate on emerging market debt


P20-21: Winners and losers Jupiter’s emerging markets debt team weigh up the opportunities and potential risks in the asset class


P22-25: Feature: In the eye of the storm These are uncertain times for EM debt, but that’s no reason to dump the asset class. Mona Dohle reports.


September 2022 portfolio institutional roundtable: Emerging market debt


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