Emerging market bond and equity funds received heavy inflows in January after a dry patch last year, aided by China’s reopening and softening inflation pressures worldwide.
“Taiwan and Korea should be beneficiaries of a recovery in the semiconductor and hardware technology sectors. Brazil could be the first major EM outside of China to enter an easing cycle next year.” The MSCI Emerging markets index is up about 6% this year, but the index’s forward 12-month is still trading at a 22% discount to the MSCI World index.
Jason Pang, a fixed-income portfolio manager at J.P Morgan Asset Management, said he is bullish on Indonesian and Malaysian government bonds as their central banks look to wind down their monetary tightening due to easing inflation pressures.