The EM framing fallacy: Emerging market debt and the trials of a misunderstood asset class

How we frame things deeply affects how we process information and subsequently act on it. So much so that, despite convincing evidence to the contrary, it can be extremely hard to shake off a fabled preconception. It seems that once a label sticks it can be very hard to dislodge.

Emerging markets are case in point. At worst, the label conjures up a misleading picture. At best, it fails to fully capture the nuances that lie behind each constituent country and issuer. Our behavioural quirks have conspired to lead many investors to structurally underweight emerging markets, particularly when it comes to allocating to debt.

Given the positive macroeconomic backdrop, strong technical tailwind and the increasing skew towards investment grade, investors would do well to rid themselves of their long-held, and deep-rooted assumptions. Those who manage to reframe their thinking may find themselves both enlightened and surprised by the true nature of this misunderstood asset class.

To read the full article click here


LV= offers Isa access to smoothed funds

LV= has launched a new stocks and shares Isa, adding to its existing range of smoothed managed funds for advised clients. It says the funds, which have previously only been available through bond and pension products, reduce the impact of short-term market fluctuations for investors. Available only to advised clients, the new LV= Isa provides […]

Bank of England keeps base rate at 0.75%

The Bank of England’s monetary policy committee has voted unanimously to keep the base rate at 0.75 per cent. The rate has stayed at this level since it was raised from 0.50 per cent in early August last year. Minutes show that the committee sees downside risks to growth as having increased in the face of […]


Aviva denies any plans for UK business split

Aviva has confirmed there are no plans to split its UK business in two parts despite talks last month of a shake-up under new chief executive Maurice Tulloch. The Financial Times reported in May that the life insurance and non-life insurance parts of the UK operation could be split in a bid to re-energise the […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm