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Investing for alpha in EM fixed income over the full cycle
Weekly investor research
04 November 2019
Alpha in EM investments comes from multiple sources across the full investment cycle. High yield contributes alpha in normal market conditions, price inefficiencies produce opportunities during shocks and higher than expected recovery values result in potential outperformance from distress situations. It is three strikes, but not quite out in South Africa. AMLO sticks to a prudent fiscal script in Mexico. South Korea’s economy shows signs of stabilisation. Ukraine moves to break up Naftogaz. The US House of Representatives approve Turkey sanctions. China gives more detail on opening its economy amidst mounting China phobia in the West. Peru’s Vizcarra looks to exploit a suspension of parliament to implement a series of economic reforms using special decrees. In the global backdrop, the US slows further, UK heads to the polls and the economic data stabilises in the European Union.