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Once Underdog of Emerging Markets, Local Bonds Get Their Day

  • Early rate hikes revive interest in beaten-down asset class
  • HSBC joins Vontobel, BNP Paribas AM in touting local bonds
Construction of an elevated highway on the outskirts of Shanghai.

Construction of an elevated highway on the outskirts of Shanghai.

Photographer: Qilai Shen/Bloomberg
Updated on

Local-currency debt in developing nations is emerging as the preferred option for investors to dodge the global bond rout.

The asset class, which has traditionally been among the biggest losers in selloffs, is now among the favorites of money managers including HSBC Global Research, Vontobel Asset Management and BNP Paribas Asset Management. Meanwhile, the main U.S. exchange-traded fund investing in the bonds attracted the biggest influx of money in six months on Monday.