We have seen 10 percent returns from sovereign debt alone this year. This EM Debt asset class has outperformed any fixed income and equity class YTD !
So what seems to be the driver in this asset class ?
For one, emerging yield spreads over underlying U.S. Treasuries have tightened over 60 basis points since the start of the year, reflecting investors’ appetite for emerging markets exposure. Second, U.S. Treasuries. Outright yields on the EMBIG are calculated as a spread over Treasuries which have risen since the start of the year. Third, the dollar has performed strongly versus other currencies. Another reason investors are buying into this Asset Class would be low Debt-GDP picture which most EM countries have.
Excel EM High Income is up YTD 11.8 percent and has outperformed the benchmark 2.47% YTD.
The Excel EM High Income is a 1st quartile fund and is managed by one of the world’s most reputable investment teams.