“Generally speaking, low real rates may be here to stay as long as monetary policy remains loose in developed markets. But it is also likely that low rates make EM bonds a riskier proposition going forward. Bond market performance may become more divergent and currency movements will likely become the dominant driver of returns.
Debt isn’t always a risky business
This article is part of
Fixed income - February 2013
Also in this special report
Flexibility is the key
Investors show faith in global policymakers
Time bombs waiting to explode
Investors should not write off government bonds
What are the dangers for fixed income in 2013?
The switch away from local currency debt
Debt isn’t always a risky business
Fitch’s scenarios show what’s bubbling
‘Bond bubble’ an over-generalisation