The war in Ukraine has added continued volatility to emerging markets fixed income assets. According to a study published by Vontobel Asset Management, whilst institutional investors globally are wary of the war’s market and economic impacts, they remain optimistic for the months ahead.
This confidence in emerging market fixed income is also already reflected in the existing portfolios of UK institutions. Nearly twice (14%) as many UK institutional investors currently hold between 10 – 20% of their portfolio in EM fixed income compared with the global average of 8%.
The top three reasons that institutional investors globally cite for increasing their allocations included: diversification benefit versus current holdings (56%), highly liquid market (48%) and favourable ESG prospects (47%).
Fidelity Emerging Markets Limited (LON:FEML) is an investment trust that aims to achieve long-term capital growth from an actively managed portfolio made up primarily of securities and financial instruments providing exposure to emerging markets companies, both listed and unlisted.
