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The Emerging market bonds market
Kevin Fordham
To avoid the instability in other markets, the world's biggest fund managers are pursuing the funds into up-and-coming market bonds, as they look for higher yields than the near zero interest rates of those developed countries. Australian counterparts although are turning away from bonds because local interest rates are now increasing and are as an alternative looking to equities and cash, to a lesser extent, for required returns.
A report by HSBC, released on Wednesday, shows the 13 largest global fund managers moved a large amount of money into high-yield or emerging market bonds during the third quarter of 2009.
Allianz, Fidelity and Franklin Templeton are some of the fund managers that will increase the market bond holdings by 19.4 per cent. They also increased their holdings of equities in Asia, other than Japan, and North America by 7.9 per cent and 6.3 per cent respectively, judging that an economic recovery is taking hold in those regions.
HSBC's Australian head of global investments Charles Genocchio said in a statement that the low interest rate environment has reduced eagerness for cash this quarter as investors look for steady expansion in still unstable market conditions.
Source: http://realestate.blogs.ozfreeonline.com/australian-real-estate-news/the-emerging-market-bonds/
12/22/2009
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