Status Update: Coronavirus And EM Fixed Income In 2020 And Beyond

Ashmore

Jan Dehn

Research

11 Pages

Ashmore examines the rapid evolution of emerging markets fixed income, highlighting how the asset class has scaled into a meaningful share of global bond markets while remaining underrepresented in indices. The paper argues EM debt is both structurally growing and inefficiently accessed, creating a disconnect between market size and investor exposure.

Key Takeaways

Massive Market Expansion: EM bonds reached $29.6trn, now 25% of global fixed income, after growing 12% YoY and are projected to hit $45trn by 2025.
Local Markets Dominate: 82% of EM debt is local currency, up from 68% in 2004, with local markets expanding from $3.0trn in 2004 to $24.2trn in 2019.
Index Underrepresentation Gap: Only 13% of EM bonds are captured in benchmarks despite over 200 markets, suggesting a large accessibility gap relative to the $29.6trn universe.
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