In our latest CIO Special, we look at the sub asset class of USD denominated Emerging Markets corporate bonds which stand out as one of the key beneficiaries of positive newsflow out of China as economic activity looks set to resume in the Asian economy. We highlight the following:
- Excluding losses from Russia, Emerging Market (EM) corporate bonds (USD denominated) outperformed their western counterparts.
- The reopening in China, which constitutes 25% of the segment, has allowed sentiment to improve for the whole asset class.
- Material reduction in spreads limits the prospects of further significant narrowing