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Article: So long samba as confidence in Brazil stumbles.(emerging market bonds )
- Article from:
- Investment Adviser
- Article date:
- July 22, 2002
- Author:
CopyrightCOPYRIGHT 2002 FT Business. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Peter Lucas
The past few months have not been kind to emerging market debt.
While US Treasuries have prospered, the dollar-denominated debt of countries such as Brazil and Turkey has fallen away dramatically. The yield spread between the JP Morgan Emerging Market Bond index and its US Treasury equivalent has subsequently widened by around 2 per cent, resulting in an underperformance of about 10 per cent in total return terms.
While mild perhaps by the standards of 1997 and 1998, this has not been a comfortable time for investors in this traditionally volatile asset class.
A great deal of this poor performance can be ascribed to local ...