Investors point to Asia in their search for the most positive EMD valuations, according to survey

Marco Ruijer

Asia has been identified as having the most positive Emerging market debt (EMD) valuations according to over half (56%) of investors surveyed on the most attractive emerging markets for investment. The findings have been announced as part of research conducted by NN Investment Partners.1

Emerging Europe was considered the second positive region in terms of EMD valuations with 40%, while at the other end of the spectrum, Latin America (13%) and Russia (7%) were considered the least favourable.

In contrast, when reviewing high yield credit valuations, Latin America is considered the most favourable according to 51% of investors. Asia came in as the second most popular (38%), followed by Russia with just under a quarter of the vote (22%) and Emerging Europe (13%).

Marco Ruijer, Lead Portfolio Manager for EMD at NN Investment Partners, commented: “Asia’s emerging markets continue to offer investors good opportunities. Lately the situation in China is improving reducing the chance of a hard landing. Philippines GDP growing remains high and reforms are taking place India and Indonesia.”

In other findings, the survey revealed that the sectors identified as offering the best value in EMD are short-duration hard currency (30%), closely followed by short-duration local bonds (27%). More than half (54%) of fund managers reported that they expect institutional investors’ allocations to EMD to increase over the next three years.

1. Findings revealed in NN Investment Partners’ own research carried out in a survey by Citigate Dewe Rogerson amongst 86 international institutional investors in July and August 2016