The fast view
- This fast-growing and increasingly diverse asset class – which has higher yields, lower duration and less leverage than US investment-grade debt for comparable credit quality – offers investors a high-grade complementary solution.
- Through time, emerging market companies have on average maintained better credit fundamentals than their similarly rated developed market peers.
- Despite the rising cost of refinancing, many EM companies are today well-placed over the short and medium term, having taken advantage of the ultra-low interest rate regime of recent years.
- Deleveraging through 2021 and beyond has resulted in many EM companies’ leverage metrics reaching multi-year lows.
- The more testing backdrop is likely to widen the gap between winners and losers, supporting a fundamentally driven investment approach.
