Carmignac Advises Caution Before Selling Emerging Market Bonds

Traders should reconsider selling emerging market bonds, according to Paris-based asset management firm Carmignac. According to Jin10, Carmignac's fund manager Alessandra Alecci highlights that emerging economies are growing faster than developed ones, with some leaders demonstrating more responsible behavior and prudent monetary policies. Additionally, these economies have relatively lighter debt burdens. Expectations of U.S. interest rate cuts are driving investors to seek higher yields elsewhere, making funds tracking emerging market assets among the biggest beneficiaries. This week, while sell-offs in tech stocks and commodities impacted emerging market equities and some currencies, emerging market bonds remained relatively stable. Last year, emerging market bonds denominated in major currencies delivered a 12.2% return, marking the best performance since 2012. Alecci notes that although replicating last year's performance may be challenging, the upward momentum for bonds is not yet over.