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Trends with Benefits #91: The Stage is Set for Emerging Markets Bonds with Eric Fine

January 10, 2023

Listen Time 32:52 MIN

Ed is joined by VanEck Portfolio Manager Eric Fine who shares insights on the state of the U.S. economy, including how its monetary policy has set the stage for emerging markets bonds.

Trends with Benefits kicks off the New Year as I chat with Eric Fine, Portfolio Manager of VanEck’s active Emerging Markets Fixed Income Strategies. We discuss the U.S. economy, including monetary policy and the strength of the dollar, and how these play into foreign exchange rates and the performance of emerging markets assets.

Eric outlines the investment case for emerging markets (EM) bonds. Firstly, EMs have low debt. Secondly, they have independent central banks which can help stabilize inflation and, for countries that are toward the end of their rate hiking cycle, investors may benefit when rates are cut. Lastly, food and energy price inflation are supportive for EMs.

Additionally, Eric, a former Russia analyst, details how he avoided Russia in his investment strategy this year. He also explains that he views the redirection of energy from Russia to Asia as a long-term trend.

Show Notes:

02:28 Are Bonds Back?

03:32 U.S. Monetary Policy and Emerging Markets

06:35 Duration in EM Bonds

09:42 The U.S. Dollar and FX Rates

19:40 The Risk of Developed Markets vs. Emerging Markets

24:23 How Eric Avoided Russia

29:48 Long-Term Trend

30:30 Trend or Fad

Trend or Fad

Listen for Eric’s take on the creator economy, ESG and artificial intelligence.

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Investments in emerging markets bonds may be substantially more volatile, and substantially less liquid, than the bonds of governments, government agencies, and government-owned corporations located in more developed foreign markets. Emerging markets bonds can have greater custodial and operational risks, and less developed legal and accounting systems than developed markets.

All investing is subject to risk, including the possible loss of the money you invest. As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future performance.

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