Investors can no longer afford to neglect emerging-market debt, which has grown by 500% over the last decade. Emerging-markets now represent over 6% of the global fixed income market, with an estimated market capitalization of US$3 to $6 trillion. Several segments now exist within emerging-market debt, with investment grade bonds making up over 75% of the universe today.
The emergence of segments in the emerging-market debt space has made risk premiums and beta more complex to define, but it is has also given investors an opportunity to build more effective and resilient exposures. By combining these debt segments to achieve more robust allocations, investors can benefit from better diversification and increased variety of fixed-income options available in emerging-markets.
Read the HSBC white paper Emerging Market Debt: Building efficient allocations.
Contact HSBC to learn more about using emerging market debt to offer your portfolio better risk-adjusted returns.
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