Investors are increasingly turning to emerging-market debt, even as Treasury yields climb to levels that would typically deter such risk-taking. Major players like JPMorgan Asset Management, Generali, and Ninety One SA are among those boosting their holdings in these bonds. Data from Bank of America Corp., based on EPFR Global, shows that emerging bond funds have seen 12 consecutive weeks of inflows.
Despite most US yields surpassing 5%, investors surveyed by BofA this month still view emerging-market stocks as one of their top trading opportunities. This shift suggests a growing appetite for higher-risk, higher-reward assets amid evolving fiscal concerns in developed markets.
The trend highlights a broader reallocation of capital as investors seek yields beyond traditional safe havens. While Treasury yields have historically acted as a brake on emerging-market debt investments, the current environment appears to be bucking that trend.