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The EM fixed income universe
The Emerging View
16 August 2016
This is the 5th annual review of the EM fixed income asset class. The analysis covers all the EM countries
whose banks and governments submit data to the Bank of International Settlements (BIS), making this one
of the most comprehensive surveys of EM fixed income so far.
We estimate that the EM debt securities universe has reached USD 18.5trn as of the end of 2015 and that
total financing in EM is now close to USD 48trn. Still, this means that EM entities only account for about
20% of total global financing at a time when EM economies make up nearly 60% of global GDP. The fact that
EM issuers are finance constrained, however, ensures that leverage ratios remain sensible and reduces the
risk of bubbles.
Today, EM fixed income offers a vastly superior alternative to negative yielding developed market bonds.