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What makes fixed income investing in EM so different?

“One key point is that the opportunity set is very different. In emerging markets, there are 80 countries with very different different credit profiles”, says Bernardini.

A second point is that developed fixed income markets have been deeply influenced by central bank policy. “Monetary easing has not had an impact on emerging markets. If anything, EM central banks have been rather hawkish, and therefore rate differential continues to be attractive.”

Part of the Bonhill Group.