Skip to Content (press ENTER)
My Account
North America
Canada
Investor Type
United States
Latin America
Argentina
Brazil
Chile
Colombia
Mexico
Panama
Uruguay
Asia Pacific
Australia
Investor Type
China (中国大陆)
Investor Type
Hong Kong (香港 – 中文)
Investor Type
Hong Kong - English
Investor Type
Japan (日本)
Investor Type
Korea
Investor Type
Singapore
Investor Type
Taiwan (台灣)
Investor Type
Europe
Austria
Belgium
Denmark
Finland
France
Germany
Ireland
Italy
 
Luxembourg
Netherlands
Norway
Portugal
Spain
Sweden
Investor Type
Public Fixed Income

Four Reasons to Revisit EM Corporate Short Duration Debt

June 2024 – 6 min read

Against a potentially higher-for-longer backdrop, a short-dated approach to EM corporate debt can provide an opportunity to pick up income, incremental yield and diversification, with less volatility.

It has undoubtedly been a volatile few years for emerging markets (EM), given the impact of rising developed market interest rates, global geopolitical tensions, and China’s real estate meltdown. But with EM corporate bond valuations having rebounded year-to-date, investors are rightly turning back to the asset class and questioning whether opportunities still exist.

The answer in our view is yes, and we believe there is a strong case to be made for short-dated debt in particular. EM corporate short duration debt , which typically has a duration of under three years, not only offers the potential for compelling value and attractive yields, but also positions investors to maximize income through a ‘coupon clipping’ strategy—all with less volatility.

Want to read the full article?

View PDF

Omotunde Lawal, CFA

Head of EMEA Corporate Credit and Emerging Markets Corporate Debt

The document is for informational purposes only and is not an offer or solicitation for the purchase or sale of any financial instrument or service. The material herein was prepared without any consideration of the investment objectives, financial situation or particular needs of anyone who may receive it. This document is not, and must not be treated as, investment advice, investment recommendations, or investment research.

In making an investment decision, prospective investors must rely on their own examination of the merits and risks involved and before making any investment decision, it is recommended that prospective investors seek independent investment, legal, tax, accounting or other professional advice as appropriate.

Unless otherwise mentioned, the views contained in this document are those of Barings. These views are made in good faith in relation to the facts known at the time of preparation and are subject to change without notice. Parts of this document may be based on information received from sources we believe to be reliable. Although every effort is taken to ensure that the information contained in this document is accurate, Barings makes no representation or warranty, express or implied, regarding the accuracy, completeness or adequacy of the information.

Any forecasts in this document are based upon Barings opinion of the market at the date of preparation and are subject to change without notice, dependent upon many factors. Any prediction, projection or forecast is not necessarily indicative of the future or likely performance. Any investment results, portfolio compositions and/or examples set forth in this document are provided for illustrative purposes only and are not indicative of any future investment results, future portfolio composition or investments. The composition, size of, and risks associated with an investment may differ substantially from any examples set forth in this document. No representation is made that an investment will be profitable or will not incur losses. Where appropriate, changes in the currency exchange rates may affect the value of investments.

Investment involves risks. Past performance is not a guide to future performance. Investors should not only base on this document alone to make investment decision.

This document is issued by Baring Asset Management (Asia) Limited. It has not been reviewed by the Securities and Futures Commission of Hong Kong.

Contact Us to Learn More

 


The form was successfully submitted.

 

Any data collected will be processed according to Barings’ Privacy Notice. You can unsubscribe at any time by clicking the link at the bottom of any promotional message we send, or by contacting us using the contact details set out in the Privacy Notice.

 

Related Viewpoints