Emerging market inflation-linked bonds

June 6, 2013

Investors have increasingly allocated assets to emerging markets in the past decade.

This primarily took the form of investment in the sovereign debt of, and stocks based in, these countries. As these markets have evolved, sub-components have emerged as viable investment options. This includes a universe of inflation-linked bonds issued by emerging market governments. Because of the real yields they offer and the potential for higher inflation in some emerging market countries, these bonds may be particularly appealing to U.S. investors who are looking for relatively high yields and less sensitivity to U.S. interest rates, and protection from inflation and currency risks in emerging markets.