RPT-EM top of the class despite Ukraine turmoil
(Repeats to additional subscribers)
* Asset class outperforms
* Cheap valuations attract investors
* Funds switch out of Russia
By Sudip Roy
LONDON, March 7 (IFR) - Emerging markets hard currency debt was the best performing fixed-income asset class in February in spite of growing political tensions in several countries, most notably Ukraine and Russia.
While the headlines in recent weeks have been anything but positive, investors are buying the asset class, spurred by relatively cheap valuations. Institutional investors, in particular, are back bidding for assets, in contrast to retail investors that continue to exit emerging markets bond funds.
The latest data from EPFR Global shows that retail accounts have withdrawn USD3.44bn from hard currency emerging markets bond funds this year, and more than USD7bn from local currency accounts.
"Yet despite the outflows, performance in EM FX, credit and local bonds has been anything but weak over the past two to three weeks, despite the developing crisis in Ukraine," said Demetrios Efstathiou, head of CEEMEA strategy at Standard Bank. Continuación...