Emerging Markets Debt: A Return to Normal

By Margé Karner - June 28, 2018

Emerging markets (EM) volatility is on the upswing, thanks to rising U.S. interest rates, mixed global growth and increased geopolitical risk. The volatility seems extreme after last year’s low-volatility environment, but I think it’s just returning closer to long-term, normal levels.

When there’s turmoil in one part of emerging markets, it’s easy to associate those risk factors with all EM countries. But not all are the same, nor are they affected by the same risks. Many factors are country specific. I’m keeping a close eye on Argentina, Turkey, Mexico and Brazil, each of which have distinctive risks.

Yes, the current EM debt environment is volatile. But I believe there may be attractive opportunities for active managers in the turmoil. Find out what I’m focusing on for the second half of 2018 in the video below.

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      International investing involves special risks, such as political instability and currency fluctuations.

      Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.

      The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.