Emerging market bonds reward investors amid global volatility
While developed country bonds globally lost value due to rate hike concerns, emerging market bonds that kept inflation under control offered strong returns.
Major fund managers such as JPMorgan Asset Management and BlackRock managed to achieve remarkable rates of return from emerging market bonds despite the turbulence experienced in developed economy government bonds.
Losses in developed country bonds
Government bonds of many developed countries, notably the US and Japan, experienced sharp declines due to concerns that interest rates would rise, causing investors to lose value.
Strong stance in emerging markets
Thanks to inflation remaining relatively under control, monetary policies already being tight, and strong fiscal positions, developing countries were protected from the wave of sell-offs.
Returns achieved by investment funds
While emerging market bonds in local currency provided returns of over 3% throughout the year, US Treasury bonds and their European peers lost 0.6% in value.
Central bank policy moves
While Brazil, Turkey, and Hungary lowered borrowing costs in August, South Korea and the Philippines opted to tighten monetary policy.