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Top Performing Emerging Market Fund Sounds Alarm on Debt Defaults

  • 10% of EM dollar bonds have high-probability of default: Man
  • Countries with managed currencies will struggle to pay debt

More debt defaults are going to roll across emerging markets because countries can’t cope with the sudden increase in borrowing costs, according to Man Group, which runs one of the best-performing funds in the industry.

About 10% of dollar-denominated sovereign debt is at a high risk of default, said portfolio manager Lisa Chua in an interview with Bloomberg. Russia and Sri Lanka have already defaulted this year, and there’s now a record 19 developing countries with sovereign debt trading at distressed levels.