The hot employment data in the United States, against the background of rising oil prices and rising inflation, as well as the new Federal Reserve Chairman Bush's preference to "watch the data" as a judgment on the direction of interest rates, are deepening market concerns about the central bank's potential path to raising interest rates. (Illustration, Bloomberg)
[Reporter Wu Ziya/Taipei Report] The hot employment data in the United States, against the background of high oil prices and rebounding inflation, as well as the new Federal Reserve Chairman Bush's preference to "observe data" as a judgment on the direction of interest rates, are deepening market concerns about the central bank's potential path to raising interest rates. As government bond yields in various countries rise, technology and semiconductors are once again among the most crowded trades, which has greatly increased the violent fluctuations and downside risks of the global stock market. Global capital flows show that while the stock market is attracting money, funds favoring bond assets are also strong, and the demand for asset diversification is still there. At this time, the local bond markets of emerging countries with outstanding performance are gradually attracting the market's attention.
According to the analysis of asset management industry, the benefits of political and economic reforms in emerging countries have emerged. The performance of financial markets this year has been remarkable. Among them, the local bond markets of emerging countries have a double-yield advantage. First, the yield rate is relatively high. For example, Egypt in Africa has a yield rate of more than 20%. Uganda, Ghana, Kazakhstan in Central Asia, and Brazil and Colombia in Latin America also have levels of 13% to 16% respectively. On the other hand, the public bond yield rate of the seven major industrial countries is only less than 4%.
The second is the opportunity for exchange rate appreciation. Although geopolitical risks have supported a slight strengthening of the U.S. dollar this year, the currencies of emerging countries have also appreciated simultaneously. Brazil, Colombia and Hungary have all experienced an increase of about 6%, highlighting the market's increased confidence in the improvement of the health of emerging countries and the strong demand for diversified U.S. dollar assets.
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Further comparing the top five overseas emerging market debt funds held by Chinese people, there is a significant gap in performance. In the past year, Franklin Templeton Emerging Countries Fixed Income Fund ranked first with a return rate of nearly 20%, more than four percentage points ahead of the next-ranked fund. With a longer investment time, the fund still leads steadily, unlike other funds that have large fluctuations in performance in various ranges.
Fund experts believe that although the double-rate advantage creates the investment value of local bonds in emerging countries, the active management experience of the manager team is still the key to performance. The reason why Franklin Templeton Emerging Countries Fixed Income Fund is favored by the Chinese people is not only the fact that it has won many fund awards at home and abroad and has a good image. The fund's trading goal is to actively pursue the three major sources of income: debt interest, bond capital gains and exchange. The latest annualized interest rate has reached more than 9%. Performance and the strength of interest distribution are the key.
The logic of fund allocation at this stage is to focus on local government bonds of emerging countries, coupled with a small amount of U.S. dollar and euro-denominated sovereign bonds, and target the reform and turnaround themes of border countries to create high-yield bond return opportunities. In terms of currency, it also widely adopts currencies from Asia, Latin America, Africa and other places, and takes advantage of the trend of exchange gains from the mid- to long-term depreciation of the U.S. dollar.
Investment experts also remind that although it is a favorable point to allocate to emerging bond markets in the medium and long term at this stage, emerging countries cover a wide range of areas and have different opportunities and risks. When investing money in emerging bond funds, it is still recommended to review the allocation connotation and refer to short, medium and long-term performance. Even if short-term shocks occur, there is less need to be impatient.
Performance % of the top five overseas emerging market bond funds held by Chinese people
Fund One year Two years Three years Franklin Templeton Emerging Countries Fixed Income Fund USD A (Qdis) shares 19.22 33.60 44.34 Amundi Fund Emerging Markets Bond A Euro 15.06 14.63 31.31 Goldman Sachs Emerging Markets Bond Fund X shares USD (annual dividend) 13.77 22.02 33.86 PIMCO - Emerging Markets Bond Fund - Category E USD (earning shares) 13.51 24.02 36.89 PIMCO Emerging Markets Local Currency Bond Fund - Category E (cumulative shares) 11.60 26.35 28.25
Data source: Overseas Fund Observatory, Lipper Information, the latest statistics on the amount held by Chinese people are as of the end of May 2026, and the performance is priced in the original currency as of 2026/6/22. Tabulation: Reporter Wu Ziya.
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