![red swan real estate red swan real estate](https://swanrealtorgroup.com/wp-content/uploads/2020/10/SwanRealtyRGB-1024x590.png)
Zambia is moving towards an IMF agreement, Ecuador’s policy (and IMF agreement) continue to bear fruit, Peru’s new government is becoming even more market-friendly, El Salvador’s bonds are cheap enough to reflect near-term risks and they’ve received a boost from their bitcoin strategy, etc. There remain plenty of attractive-albeit more uncorrelated or defensive-emerging markets (EM) bonds. It also probably means a steeper yield curve, though bounded by China and the absence of further stimulus developments in the U.S. This uncertainty probably means another leg of the risk-off trade. At the least, these represent uncertainty. At the same time, the prospect of four new voters, including a replacement for Fed Chair Jerome Powell, likely means a more dovish Fed. 3 The trading scandal is undermining Fed credibility. In addition to the “stagflation” scenario that we noted in our last monthly, the Fed is now home to new and proximate risks that seem unpriced to us. 2 (We have updated China property bond, growth, and other charts below.) This is a major challenge for high-beta emerging markets foreign currencies (EMFX), especially. As we wrote in China’s Evergrande Collapse is Spreading, we see this flowing through to an already-weaker Chinese economy and a weaker Chinese currency (over quarters). Most important, China’s property sector bonds still don’t fully reflect risks. Many China risks remain unpriced, in our view. By investing in emerging markets debt securities, the Fund offers exposure to emerging markets fundamentals, historically characterized by lower debts and deficits, higher growth rates and independent central banks. These securities may be denominated in any currency, including those of emerging markets.
![red swan real estate red swan real estate](https://swanrealtorgroup.com/wp-content/uploads/2020/10/GetMedia-554x554.jpeg)
The VanEck Emerging Markets Bond UCITS (The "Fund") utilizes a flexible approach to emerging markets debt investing and invests in debt securities issued by governments, quasi-government entities or corporations in emerging markets countries.