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Emerging Market Bonds Re-Emerging?




The Wall St Journal sees evidence bond investors are re-entering emerging markets. Inflows into emerging-market bond mutual funds have hit 10 consecutive weeks, the longest stretch since 2017. This uptick follows a run for the exits in Pandemic’s first blast in March. 

The idea that these holding may soar is pitched mere weeks after the WSJ ran a story that "Emerging Market Bonds Sour" - so go figure. VEMBX is mentioned as a jewel amongst such - the fund manager cited for successfully rotating amid themes to keep ahead of the reaper of grim.

The re-emergence of Emerging fund favor does not include bonds issued in local currencies. The latest activity has not seemed to changed things for VEMBX. These figures indicate some of what is going on with the fund. Shown above are the emerging markets they are in. Below shown are the Types of bond rating categories they go for. This fund ran up (or sidled up) from the doldrum month until August. Someone who bought then has seen little movement and some slight decline.


Meanwhile there are signs that the recent flight from Tech positions has pushed investors to the safety of US government bonds. Call it 'debt frenzy.' Tho the yield is poorer, its safer. Said Nick Maroutsos, head of global bonds at Janus Henderson Investors. "That demand is there because people are craving any sort of return."

On Monday the rotation from (exodus from) Tech will leak out into the S&P500 and Dow.

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