Emerging markets fixed income

How much longer can it run?

23 Jan 2018

Just like the best ultra-marathon runners, EM stamina and resistance endured through the fourth quarter of last year.

Emerging markets delivered strong returns during the last quarter of 2017 and regaled investors with double digit returns for a second year in a row in credit as well as in FX and rates.

The synchronized recovery of global economic activity with stable inflation, supportive commodity prices and a thoughtful and well communicated global monetary policy tightening by developed markets' central banks kept volatility and developed rates well anchored in a relatively narrow range, thus allowing for riskier carry trades to flourish well beyond expectations.

Improvements in emerging economies' fundamentals helped mitigate the negative impact of sporadic bouts of uncertainty brought about by geo-political and domestic shocks in several regions and countries.

Canada Asset Management

Views and opinions expressed are presented for informational purposes only and are a reflection of UBS Asset Management’s best judgment at the time a report was compiled, and any obligation to update or alter forward-looking statement as a result of new information, future events, or otherwise is disclaimed. Commentary is provided at a macro level and is not with reference to any investment strategy, product or fund offered by UBS Asset Management and is provided in Canada generally pursuant to the registration exemption provided for in Section 8.25(2) of National Instrument 31-103 and in Ontario pursuant to Section 34 of the Securities Act (Ontario) and does not purport to be tailored to the needs of the person or company receiving the advice.. The information contained in the materials should not be considered a recommendation to purchase or sell any particular security. The materials and content provided will not constitute investment advice and should not be relied upon as the basis for investment decisions. As individual situations may differ, clients should seek independent professional tax, legal, accounting or other specialist advisors as to the legal and tax implication of investing. Plan fiduciaries should determine whether an investment program is prudent in light of a plan's own circumstances and overall portfolio. UBS Asset Management services offered to Canadian persons are provided by UBS Asset Management (Canada) Inc., a Nova Scotia corporation. UBS Asset Management (Canada) Inc. is an indirect wholly-owned subsidiary of UBS AG and is registered as a portfolio manager and exempt market dealer (in all provinces of Canada), commodity trading manager (Ontario), adviser – commodity futures (Manitoba) and investment fund manager (Ontario, Quebec and Newfoundland), all pursuant to Canadian securities law. Materials may include forward-looking statements. Actual future results, however, may prove to be different from expectations. Past performance is no guarantee of future results. Potential for profit is accompanied by possibility of loss.

Please confirm you are a Canada resident to proceed.

Please select at least 1 checkbox