How Different Asset Classes Are Performing
VanEck VAN ECK: In fixed income, investors have to deal with this more volatile environment, and we see four different ways they can go with it: Number one, you can…
VanEck JAN VAN ECK: U.S. equities were affected because corporate earnings turned positive only when energy companies started recovering in the third quarter. In fixed income, high yield improved after…
According to Morgan Stanley, US high yield bonds (IGHG) (LQDH) generated a return of 14.4% in 2016.
The S&P 500 Energy Select Sector (XOP) (OIH) is trading at the highest PE ratio of ~32x relative to the other sectors based on EPS estimates for 2017.
Emerging markets have done well this year and should continue to attract investor interest around the globe. Latin America is leading year-to-date.
The Barbell strategy involves putting half your portfolio in defensive, low-beta sectors or assets and the other half in aggressive, high-beta sectors or assets.
Emerging market debt can be a great source of income potential in a diversified portfolio, provided you can manage it during a period of extreme volatility.
The VanEck Vectors EM Local Currency Bond ETF (EMLC) could be a good entry point after it took a hit following rising interest rates and volatility in the US dollar.
You have two options when it comes to investing in emerging market bonds—hard currency bonds and local bonds.
Investors are stepping back into emerging market bonds after removing billions of dollars from emerging markets in 2016.
Strong investor interest in emerging market debt has continued despite adverse political and economic issues in some countries.
According to a recent BofA Merrill Lynch Global Investment strategy report, emerging markets are expected to grow at a modest pace of 4.7% in 2017.
Negative bond yields in Japan and low Fed funds rates in the United States and the Eurozone were one reason emerging market bonds performed well in 2016.
Since the US presidential election, emerging markets have bounced back as though the election never happened.
The demand for emerging market bonds improved when fear of rate hikes abated in 2016. Fundamentals are still favorable for emerging debt markets.
A strengthening dollar impacts the emerging bond market’s performance. Uncertainty started revolving around the performance of emerging market debt.
Donald Trump’s surprise presidential win and the rising dollar called for a sell-off in most emerging market currencies like Mexico and Turkey.
In the emerging market bond space (PCY) (EMLC), high-yield bonds and local currency bonds outperformed hard currency sovereign bonds.
Trump’s unexpected presidential victory caused short-term uncertainty about markets and policies. His win reinforced a reflationary theme in global markets.
So far in this series, we’ve discussed how demographic changes are transforming emerging markets.