, Columnist
$19 Billion in Emerging-Market Debt Boils Down to the Dollar
A rally based on a weaker U.S. currency could pivot on investors.
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Investors have poured $19.2 billion into local-currency emerging-market debt funds this year. That's the fastest pace of flows since 2010, helping to drive some of the biggest returns on record.
Some fundamental reasons exist for bond buyers to gravitate to this debt. For example, inflation is slowing in some of these countries, such as Brazil and Colombia. That means central bankers have room to cut interest rates, which typically bolsters bond markets.