Alex Borer

“In terms of economic development, the slowdown in the West is intensifying. To make things worse, Asia is also starting to cool down. Investors realise the fate of emerging markets is to a non-trivial degree depending on the import demand from industrialised countries. Continued outflows in emerging equity, bond and FX products end a long-term series of massive capital inflows. We believe credit markets offer significant value after the recent spread widening. Accordingly, we increase our positions in high yield and emerging market bonds by 2 per cent each at the expense of inflation linked bonds.”