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CHART CENTRAL

Re-emerging markets

Yields on emerging markets corporate issues have been on the decline since the end of 2015 as investors saw less risk and more opportunity in the sector. Yields spiked following the election, jumping 44 basis points in the immediate aftermath, before retreating to previous levels. The yield distribution on new issues has been skewed lower in 2017 relative to 2016 and 2015 as companies are able to borrow at lower rates. With yields falling, corporate issuers have taken notice as new debt so far in 2017 has totaled almost 5,000 new issues, already one-fifth of what was issued in 2016 as a whole.

On a larger scale, both the emerging markets debt and equity indexes recovered as concern over what the U.S. presidential election means for the economies under their respective umbrellas abated. The emerging markets debt and equity markets have outperformed their broad market counterparts thus far in 2017. Much of the recovery has been attributed to a settling of market fears over what U.S. trade policy will look like in 2017 and beyond, while some areas of the market have been seen as a value buy as asset managers pick up depressed assets.