The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

JPMorgan: Inflows into EM bond funds set to halve in 2020

After a stellar year for emerging market bonds in 2019, the world’s largest EM bond house says returns don’t look so rosy for 2020.

flow-780



Emerging market dedicated bond fund inflows are expected to fall by over half in 2020 on account of less accommodative monetary easing and rising EM country risks, according to JPMorgan. Inflows are predicted to slow to around $30 billion, down from around $65 billion in 2019, according to analysts at the bank.

With a peak of $17 trillion of global bonds offering negative returns in 2019, investors turned to EM bonds to pick up yield, prompting above-trend demand for the asset class last year. Now bankers expect a rebalancing.

“Developed market and emerging market monetary easing is likely to be less supportive… and our modest return forecasts for 2020 point to lower return-following EM bond flows,” say the JPMorgan analysts. “For institutional investors, we expect below-average strategic flows despite the global search for yield, given EM country risks and late-cycle concerns.”

Challenges

The challenge for EM returns comes from the starting point of a strong 2019 performance driven by the substantial fall in global yields, which is unlikely to be repeated.

EM sovereigns returned 12.4%, corporates 12.1% and EM local bonds 9.7%




You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree