- Some estimates put the amount of global bonds trading with negative yields as high as $10T, so who could fault an investor for turning to emerging market paper as a way to eke out some income, says Brown Brothers Harriman.
- The team notes portfolio investment flows into EM have been positive in four of the last five months, with the early signs pointing to a continuation of the trend in August.
- While Brown Brothers sees more gains for EM credit, it waves the yellow flag: "A purely liquidity driven model of investing will work ... until it doesn't. We caution investors against getting too optimistic about EM, as fundamentals are lagging the price action."
- The iShares JPMorgan USD Emerging Market Bond Fund (NYSEARCA:EEM) is higher by 10.7% YTD, while yielding north of 4%.
- ETFs: EMB, PCY, TEI, EDF, ELD, EDD, EMLC, VWOB, GHI, EDI, EMD, MSD, SBW, LEMB, EMAG, EBND, EMSH, FEMB, EMIH, EMTL, EMBH, IGEM