Considering Emerging Markets? Bonds May Be Preferable To Equities

Considering Emerging Markets? Bonds May Be Preferable To Equities

The continent of South America

The big question is whether EM assets can outperform U.S. stocks and bonds. As shown in the table below, returns for EM equities have trailed those in the U.S. considerably for more than a decade now, while EM bonds have fared relatively well versus U.S. bonds until this year when Russia invaded Ukraine. Note that the EM bond returns shown are for sovereign debt that is U.S. dollar denominated and which are generally governed by U.S. or U.K. laws.