There has been a significant evolution of emerging markets debt over the past fifteen years, with the asset class benefitting from structural improvements and an expanding investor base. The move away from fixed exchange rates coupled with increased foreign exchange reserves and more disciplined fiscal and monetary policies have contributed to improved fundamentals among many emerging market countries across Latin America, Eastern Europe and Asia. As a result of these improving fundamentals, many credit ratings have been upgraded, with the result that over half of emerging markets now carry investment grade ratings. Because of the shifting risk profile and stronger fundamentals than in developed markets, emerging markets debt is gradually assuming a more important place in investors’ asset allocations.
Reasons to Invest in Emerging Markets Debt
HSBC Global Asset Managment