Business & Finance
EM Investors Are Favoring Local Bonds as Dollar Debt Lags
Key Points
EM Investors Are Favoring Local Bonds as Dollar Debt Lags Emerging-market investors are for now sticking with local-currency sovereign debt as surging Treasury yields dim the appeal of dollar-denominated developing-nation bonds. Behind the strategy are attractive valuations and the potential to profit from carry trades, where investors borrow in low-yielding currencies to invest in higher-yielding assets.
EM Investors Are Favoring Local Bonds as Dollar Debt Lags
Emerging-market investors are for now sticking with local-currency sovereign debt as surging Treasury yields dim the appeal of dollar-denominated developing-nation bonds.
Behind the strategy are attractive valuations and the potential to profit from carry trades, where investors borrow in low-yielding currencies to invest in higher-yielding assets.