- Emerging markets fixed income securities range across the quality spectrum and feature yields comparable to U.S. high-yield debt, but with lower correlation to U.S. stocks.
- Capital Group relies on longstanding emerging markets experience and global research depth of fixed income investment professionals to find opportunities related to mispriced assets, currency exposure and yield-curve positioning.
- Adding emerging markets bonds in client portfolios can increase yields and enhance overall diversification, in turn lowering overall risk.
The emerging markets debt market offers an often-overlooked opportunity for investors seeking relatively high yields and less correlation with U.S. stocks, a key reason to hold bonds in the first place.
Emerging markets economies are rapidly increasing their share of global growth and are expected to contribute half the global GDP by 2021.1 As these nations’ economies mature and grow, so do their debt markets. The investable emerging markets debt market has more than tripled since 2000 to around $6 trillion.2About half the emerging markets debt universe is investment grade.3