Investors should look for emerging market rebound, says bond expert

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Worsening trade tensions and political instability will throw up various investment opportunities around the world, according to one strategist, who believes that emerging market (EM) assets could give back solid — albeit risky — returns.

“For the brave and further afield, investors should be looking at emerging markets,” Nick Gartside, international chief investment officer of fixed income at J.P. Morgan Asset Management, told CNBC Friday.

Emerging markets have been out of favor this year amid a resurgent U.S. economy. The dollar has pushed higher on the anticipation of more rate hikes from the Federal Reserve and American investors have brought their dollars home in the hope of higher returns. The MSCI emerging markets index is down some 12 percent since late January when the greenback started its upward trend.

When asked where to buy, given ratcheting up trade tensions and a potential resolution of the Italian political crisis, Gartside said that following a “brutal May” for bonds denominated in local currencies, these beaten-down EM assets could be a place for investors to look.

2018-06-01 08:41:00

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