•Argentina: “We think Argentina is the next Brazil,” said Sergio Trigo Paz, chief investment officer for emerging markets fixed income at Fischer Francis Trees & Watts UK Ltd., London. A skilled middle-class population, commodities exports and strong business relationships with growing Asian markets makes Fischer Francis' outlook on Argentina bright.
•Colombia: Pierre-Yves Bareau, managing director and head of emerging markets debt at J.P. Morgan Asset Management in London, said Colombia is a notable oil exporter and that the country's governance is improving. “Colombia tends to be forgotten. People tend to focus on Chile and Brazil (in South America).”
However, Luz Padilla, emerging markets debt portfolio manager at DoubleLine Capital LP in Los Angeles, said Colombia's U.S. dollar-denominated sovereign debt “is trading at levels that seem to leave very little room for spread compression.”
•Hungary: Ms. Padilla said she's not a fan right now of Central Europe, either: “We pared back (exposure to) emerging Europe because we were concerned about what's happening in developed Europe.”
Mr. Bareau said JPMAM had been overweight on Hungarian bonds, but valuations have risen, and they are taking profits.
•India: Most managers give a thumbs-down to India because of inflation concerns and overheating. However, David de Weese, partner at Paul Capital, New York, said companies in India in a new portfolio the firm purchased are growing at a rate of 30% a year. “That cures a lot of sins,” he said. “It's a risk-reducing factor.”
•Korea: “Cyclical markets” such as Korean and Taiwan are “economies that have companies that should benefit from a sustained (global) recovery,” said Philip Poole, London-based global head of macro and investment strategy at HSBC Global Asset Management.
•Peru: Managers worry about the upcoming elections in Peru, in which leftist candidate Ollanta Humala led balloting in April preliminary voting. One bond investor who asked not to be identified said Mr. Humala promises to be the next Luiz Inacio Lula da Silva, the former Brazilian president. “The returns right now on Peruvian assets aren't enough to persuade us to take that risk,” the manager said.
•Poland: Much like Hungary, Poland suffers by its association with Europe's heavily indebted periphery. However, Kieran Curtis, emerging markets debt portfolio manager at Aviva Investors, London, likes Polish debt, primarily because of the zloty, which has a high beta to U.S. dollar weakness (that is, its value moves inversely to that of the dollar).
•Turkey: Mr. Trigo Paz said he's positive on Turkey because he believes its government is handling inflation well. However, said Cristina Panait, senior vice president and senior emerging markets strategist at bond specialist Payden & Rygel in Los Angeles, said U.S. dollar-denominated Turkish debt is expensive, and she's concerned about upcoming elections.