As we move towards the mid-way point of the year, Polina Kurdyavko, Head of BlueBay Emerging Markets and Senior Portfolio Manager, and Mihai Florian, BlueBay Senior Portfolio Manager of Emerging Markets, discuss the drivers of idiosyncratic risk and returns in emerging markets across liquid and illiquid markets.
Watch time: 61 minutes, 14 seconds
Key Points
There has been a fundamental improvement in sovereign balance sheets and an improved pace of growth in emerging markets.
We've seen a more prudent fiscal stance in the emerging markets versus developed markets in terms of expanding fiscal deficits.
90% of companies in the emerging markets are funded through loans, not through bonds.
Emerging market loans don't have liquidity, so the illiquid opportunity set is significant.
In our view, this is an environment where we are expecting a lot of event risk to materialize in emerging markets.