The Case for Local Currency Emerging Market Debt

Local Currency EM government debt has been through a number of distinct cycles since the early 2000’s when these markets became more liquid, widely traded, and began to be seen as viable investment destinations. After facing a number of headwinds, we believe that the asset class is now well placed to benefit from a sustained upswing. Further US dollar weakness, relatively high and attractive real yields, sound macroeconomic management, and declining inflation across the major economies within the asset class suggest that it is about to undergo a sustained period of strong performance.