Viewpoints

Rethinking Emerging Markets Allocations

Emerging markets is an asset class that deserves a fresh look given strong investment fundamentals, as well as its current potential to deliver attractive risk-adjusted net investment income relative to other sectors of the fixed income market.

Emerging markets (EM) debt investments can provide strong risk-adjusted return potential and diversification opportunities, yet represent just 2.0% of U.S. life insurance companies’ bond portfolios, on average. On 23 March, PIMCO co-hosted a webinar with the American Council of Life Insurers (ACLI), titled, EM Debt – Capital Efficient Investing for Insurers. Pramol Dhawan, who leads PIMCO’s emerging markets portfolio management team, and Bruce Stanforth, a portfolio manager and head of asset allocation at MassMutual, discussed emerging markets with Robert Young, who leads PIMCO’s financial institutions team. The following is a summary of the opportunities they see in emerging market debt, as well as insights into how insurance companies can approach investing in this asset class.

Q. WHAT IS THE CASE FOR EMERGING MARKETS DEBT TODAY?

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The Author

Pramol Dhawan

Head of Emerging Markets Portfolio Management

Bruce Stanforth

Robert Young

Head of Financial Institutions Group

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