Catherine Kress

Aug 10, 2023 | advisorperspectives.com | Wei Li |Ben Powell |Axel Christensen |Catherine Kress

EM hard currency debt – issued in U.S. dollars and thus cushioning returns from any local currency weakness – looks more attractive. Hard currency debt is more diversified than the local currency, based on J.P. Morgan indexes, and it could benefit from the rewiring of globalization. We also think lower credit ratings in EM hard currency debt are priced in given that yields are at a near 14-year high versus local currency bond yields, Refinitiv data show.