Diliana Deltcheva


“If you think about the asset class’ drivers in terms of interest rate and credit risk, we don’t see many countries defaulting.” Diliana Deltcheva, Candriam


Portfolio Institutional: Capital has flown back into emerging market debt this year, but is this recovery sustainable? Stuart Trow: Taking monetary tightening off the table has been good news. Generally, emerging market debt thrives in lower for longer scenarios. It’s an old argument but it still carries some weight. Mathias Neidert: I have to add the usual disclaimer. We are dealing with emerging market debt, which is considered a risk asset class so there is no free lunch. Sustainable or not, the recovery will be followed at some point by a correction. Oil, geopolitical develop- ments, US monetary policy and elections may trigger that. So volatility should be expected from this market as well as great returns. Krzysztof Lasocki: Fundamentals, broadly speaking, have improved since last year. Many countries’ trade balance improved, even in Argentina and Turkey. There are reasons to be cautiously optimistic for the future. We shouldn’t have interference from the US in terms of monetary tightening or rate hikes. There are reasons to believe that the dollar could have reached its peak, so that’s good news for currencies. Spreads are attractively priced as well.


6 June–July 2019 portfolio institutional roundtable: Emerging market debt


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