Investors bet on emerging market alpha
As external debt markets are shrinking, local-currency bond markets are growing. This is partly being driven by bond exchanges as sovereign borrowers reduce their external debt for local-currency issues. Rapid development of domestic pension funds and other local investor bases is also acting as a spur. Another big influence is “soaring demand from foreign investors,” according to Mike Conelius, emerging markets portfolio manager at T Rowe Price. Many of these buyers are long-term institutional investors, such as pension funds and insurers.
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