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Man Group Says U.S. Yields Put Emerging Bonds at Tipping Point

  • Stretched valuations, inflation outlook also threats: Man GLG
  • EM bond index has already dropped almost 3% from January high
Updated on

Emerging-market bonds are becoming increasingly vulnerable as Treasury yields climb with the level of 2% on the U.S. 10-year note likely to trigger major outflows, according to Man Group Plc, which oversees $124 billion.

Developing-nation debt is also under threat due to stretched valuations, the prospect of quicker inflation and the danger of Federal Reserve missteps as it tries to counter the pandemic’s impact without overheating the economy, Lisa Chua, portfolio manager on the emerging-markets debt team at the group’s unit Man GLG, which includes hedge funds, said in an interview.