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Podcast: Hidden Strength

Volatility creates a wealth of mispriced opportunities. Head of Emerging Market Corporate Debt, Victoria Harling, explains the risks and opportunities facing investors in a rising-rates environment.

The fast view

  • Uncertainty around macro themes, including Chinese policy, drove EM corporate debt market volatility in 2021. Yet the overall market has shown resilience.
  • In 2022, investors face uncertainty around inflation and interest rates. EM corporate debt is generally well placed in a rising-rates environment.
  • Company fundamentals in EM continue to strengthen and leverage metrics have fallen back. Many companies entered 2022 on very firm foundations.
  • Political risk – particularly in Latin America – is largely already priced in, creating attractive valuations and relative-value opportunities.
  • We see significant opportunities in China, as fears of a recession seem overblown and policy loosening already looks set to help mitigate macro headwinds.

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