Experts tip their favourite emerging market bond funds
The Telegraph online
8:15AM GMT 20 Dec 2010
Risks and rewards of different emerging bond funds vary widely and investor enthusiasm for the sector is now a global phenomenon with one exchange-traded fund (ETF) breaching the $1bn (£640m) mark last week.
The iShares JPMorgan emerging market bond fund ETF attracted inflows of more than $700m this year ......
......Alan Steel of IFAs Alan Steel Asset Management urged a cautious approach: "Many emerging markets are in entrenched bull markets with very strong well balanced economies but the highest returns are probably behind us.
"At this stage we would prefer a safe pair of hands who has a wider mandate so can switch to other mispriced bonds when emerging market bonds become overbought. It makes sense to leave such decisions to experienced experts like Michael Hasenstab at Franklin Templeton Total Return Global Bond Fund, whose current holdings show heavy exposure to Korea, Australia , Malaysia, Norway, Poland, Argentina. He is also long on the US dollar and short on the euro - two great contrarian calls .
"Franklin Templeton is the most experienced fund investor in emerging markets - thanks to the skills of the legendary Mark Mobius - and that is crucially important in our view.
"Is it too late to join the party? I don't think so - and it's worth noting that the Abu Dhabi Sovereign Wealth Fund which still invests $680m a day, is 20 per cent invested in global bonds with no bond exposure at all to the UK, US or Euro. Perhaps it's time to follow the Fred Flintstone investment theory and buy things like Abu Dhabi do."
Quote courtesy of The Telegraph online
Monday 20 December 2010