Combatting the inflation threat
By International Adviser, 5 Jul 18
Investors need to be focusing more attention on the potential for rising rates – both inflation and interest – and the implications for fixed income portfolios as global economic growth conditions continue to improve, says Neuberger Berman’s Jon Jonsson.
The global macroeconomic backdrop remains supportive of emerging market debt for the coming year, as emerging economies are well positioned to benefit from higher commodity prices, an increase in developed market capital expenditures, better liquidity locally as FX reserves are rebuilt and the tailwind of still-easy global financial conditions.
While emerging markets commodity producers like Russia, South Africa and most of Latin America are still recovering from the commodity price downturn of a few years ago, improvements in the complex should help them rebuild over the course of the next year.
Real yields remain attractive versus devolved markets and on standalone basis and currencies remains undervalued versus fundamentals and compared to its own history in real terms.
Tags: Inflation | Neuberger Berman
