There is value in emerging-market government debt, according to Mark Nash, who had previously been pessimistic about bonds, including Treasuries and credit.
Nash, who is in charge of the Jupiter Strategic Absolute Return Bond Fund, which outperformed its rivals by 96% this year, stated, “We shorted everything. However, “we do favour local unhedged developing market bonds.”
Nash recommends the securities offered by Brazil, Indonesia, and Mexico, some of the best-performing sovereign debt this year as a result of a boom in commodities, early rate increases, and waning concerns about a hawkish Federal Reserve. With inflation mostly under control and their attractiveness increased by positive real rates, he believes they only stand to gain more.
For the fund, the wager is paying off as it increased 5.7% this year despite a record yearly decline in US government bonds. In 2022, Brazil’s debt has increased by 11%, while Mexican notes have increased by 5%. Investors in Treasurys, however, lost 12% of their money.
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