Emerging Market Debt: It's Time to Get Tactical

By Margè Karner - November 26, 2018

Emerging market (EM) debt—like equities—was the subject of much scrutiny in the third quarter. But I believe that too many investors were painting all EM debt with a very wide brush. Sure, a strengthening dollar and increasingly higher interest rates in the United States will weigh on EM countries generally, but not equally. Why? Because emerging market countries are not all the same. For example, some have more dollar-denominated debt than others.

And then there's this: the EM countries of today aren't like a generation ago. In the past, many of them had fixed exchange rates, and now most have floating rates. That allows for a natural adjustment that helps with the exchange rate and balance of payments.

In this quarter and for the foreseeable future, China is the issue that's keeping me up at night. The escalating trade war with the U.S. is causing turmoil not only in China, but throughout emerging markets as a whole.

Check out my latest video to learn about my EM debt outlook, and what I think about current valuations and how to pick your spots for exposure.

Margè Karner
Margè Karner


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    Emerging Market Debt: It's Time to Get Tactical

    Emerging market debt was the subject of much scrutiny in the third quarter, but Sr. PM Margé Karner believes that too many investors were painting with a very wide brush. Hear her thoughts on current valuations and how to pick your spots for exposure in a Q4 2018 outlook video.

    Opportunities in Emerging Market Debt: The Case for Investing Selectively

    In this quarterly update, Portfolio Manager Margé Karner discusses the good and the bad of emerging markets debt heading into the new year.

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