Emerging markets

Investors jump on the emerging markets bandwagon

Reproduced from TCW Group; Chart: Axios Visuals

A growing chorus of U.S.-based fund managers is betting that emerging market stocks and bonds are poised to outperform U.S. assets this year. The momentum for emerging markets has grown so strong that it has become almost a consensus trade, with investors even urging clients to buy EM junk bonds.

What's happening: Following 2019's blowout returns for U.S. stocks and strong performance for high yield, government and even municipal bonds, investors expect U.S. assets to fall to earth in 2020 and are positioning in emerging markets.

Investors returned to emerging markets in December

Illustration of clock with dollar signs instead of numbers.
Illustration: Eniola Odetunde/Axios

Foreign investors flocked back to emerging markets in December, data from the Institute of International Finance shows.

What happened: IIF estimates EM stocks and bonds drew $30.7 billion from foreigners in December, a significant increase from the $19.9 billion in November, and the continuation of a recovery from EM's summer slump.