Traders Lured by High-Yield ‘Sweet Spot’ in Emerging Markets
- PineBridge likes local emerging-market debt with high rates
- ETF focused on the category posted best month since Dec.
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Traders are gaining confidence in nations that pay the steepest local interest rates.
Investor anxiety, as measured by one-month implied currency volatility, dropped to multi-month lows last month in Russia, South Africa and Brazil -- countries with some of the most generous yields on their local government debt. Those nations are benefiting from demand for their bonds as interest rates in the developed world stay suppressed amid a pickup in prices for the commodities they export, including gas, gold and copper.