Cheap financing and rate compression have boosted Singapore Reits with emerging market assets.
But the surge in emerging market bond prices this year is forcing investors to be more discriminating.
The US dollar and oil prices make emerging Asia the preferred investment region, according to senior portfolio manager Peter Sleep at wealth manager Seven Investment Management.
Even though a growing group of asset management firms are warming to emerging markets, Gary Reynolds, CIO at UK-based wealth and asset management firm Courtiers, remains bearish on the region and believes the US is the most attractive opportunity.
The enormous domestic bond market is “more liquid than people might expect”, said Robert Simpson, portfolio manager at Insight Investment, which is about to become one of the first foreign firms to invest through the newly-opened bond channel.
A negative yielding bond is trading like a commodity, according to Oksana Aronov, managing director of JP Morgan’s Income Opportunity Fund.
FE data shows that over the trailing three years, more passive China equity funds than actively-managed ones had returns of 20% or more.
A long record of poor performance may be over for EM equities, but the view is still contrarian, said Robert Secker, investment specialist on the M&G global emerging markets team.