Koesterich Highs EM Bond Opportunities (EMB, LEMB, PCY)

May 01, 2012


Emerging markets bonds should be included in investors’ fixed-income portfolios, in part because of how the sector demonstrated resilience during the financial crisis, according to an article on Benzinga that cited a note by iShares Global Chief Investment Strategist for Russ Koesterich.

Koesterich argued in his note that, on average, debt-to-GDP ratios in emerging markets is less than 40 percent. In comparison, the developed world debt has surpassed 100 percent of GDP. For example, Turkey’s ratio is 40 percent, while in the U.S., the ratio is slightly over 100, the article said.

Also, with the exception of India, Inflationary pressures are fading, the article said. Koesterich expects increased stability and improving fundamentals in emerging markets to provide the sector with yearlong momentum, the Benzinga article said.

Koesterich highlighted the iShares J.P. Morgan USD Emerging Market Bond Fund (NYSEArca: EMB).

Other funds to consider are the PowerShares Emerging Markets Sovereign Debt ETF (NYSEArca: PCY) and the Emerging Markets Local Currency Bond ETF (NYSEArca: EMLC), according to the article.

To read the full story, visit Benzinga.com.


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