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The article discusses the impact of the US presidential election on emerging markets, highlighting the potential consequences of a victory by either Donald Trump or Vice President Kamala Harris. Investors are closely monitoring currency movements, bond markets, and equities in countries like Mexico, China, and Ukraine, as they prepare for potential shifts in trade policies and economic outlooks. The outcome of the election could have significant implications for emerging markets, with different scenarios expected to affect various regions differently. [Extracted from the article]

Sustainable investments in emerging markets are struggling due to capital outflows and the appeal of higher-yielding energy bonds. Emerging markets have experienced consecutive outflows for the past three years, largely due to global monetary policies. Bonds from companies with tarnished ESG reputations, such as Vedanta Resources Ltd. and Braskem SA, have provided higher returns compared to ESG-focused strategies. The sale of green bonds in developing nations has also contracted. Investors are finding it difficult to navigate different regulatory frameworks and the European Union's crackdown on the use of the ESG label is deterring investors. However, money managers emphasize the importance of including emerging market issuers in sustainable finance initiatives. [Extracted from the article]

Money managers are comparing Latin American assets as the region's largest economies take different paths following the Federal Reserve's interest-rate cut. Mexico is expected to lower borrowing costs, while Colombia may see a deeper cut due to subsiding inflation. Brazil, on the other hand, has begun a hiking cycle with an increase in interest rates. Investors believe that the rate differential will strengthen the Brazilian real compared to other currencies in the region. However, there are differing opinions among investment firms, with some betting on a weaker Brazilian currency due to concerns over the government's spending habits. [Extracted from the article]

Money managers are comparing Latin American assets as the region's largest economies take different paths following the Federal Reserve's interest-rate cut. Mexico is expected to lower borrowing costs, while Colombia may see a deeper cut due to subsiding inflation. Brazil, on the other hand, has begun a hiking cycle with an increase in interest rates. Investors believe that the rate differential will strengthen the Brazilian real compared to other currencies in the region. However, there are differing opinions among investment firms, with some betting on a weaker Brazilian currency due to government spending habits. [Extracted from the article]

Lazard Asset Management has hired Robert Forsyth, a former executive at State Street Global Advisors, to lead its expansion into the actively managed exchange-traded funds (ETFs) market. Forsyth will be the managing director and global head of ETFs, responsible for developing and expanding Lazard's active ETF platform. Lazard's move comes as the market for actively managed ETFs is growing, with these funds attracting close to 30% of inflows across all US-listed ETFs this year. BlackRock Inc. and other fund issuers are optimistic about the future growth of actively managed ETFs, predicting the category to reach $4 trillion in assets by 2030. [Extracted from the article]

Top-performing emerging-market bond managers are adjusting their positions in response to an anticipated interest rate cut in the US. Investors are focusing on local-currency debt and select reform stories in countries like Ecuador and Argentina, which are expected to benefit from the rate cut. Despite recent volatility in emerging markets, funds from Pimco, GMO, and Neuberger Berman have outperformed their peers by returning over 16% in the past year. The expectation is that lower US rates will attract more money into emerging markets, potentially triggering a domino effect of capital inflows. [Extracted from the article]

Top-performing emerging-market bond managers are adjusting their positions in anticipation of a significant interest rate cut in the US. Investors are focusing on local-currency debt and select reform stories in countries like Ecuador and Argentina, which are expected to benefit from the Federal Reserve's rate cuts. Despite volatility in emerging markets, funds from Pimco, GMO, and Neuberger have outperformed their peers, returning over 16% in the past year. The expectation is that lower US rates will attract more money into emerging markets, potentially triggering a domino effect of capital inflows. [Extracted from the article]

According to Pacific Investment Management Co., local currency debt from emerging markets will offer the best returns for investors once the Federal Reserve begins lowering interest rates. This is because emerging-market policymakers have been cautious about easing cycles while US rates remained high. However, with the Fed expected to cut borrowing costs next month, investors will seek alternative sources of returns. The asset class has already seen an increase in performance, with emerging-market local currency debt delivering over 2.3% returns in August, the best month this year. Pimco's head of emerging-market debt, Pramol Dhawan, recommends investing in long-term rates in Latin America, as well as currencies and local bonds in countries like South Africa and Turkey. [Extracted from the article]

Emerging-market investors are turning to battered assets in the developing world as they brace for volatility in the US election. The lack of clarity surrounding Kamala Harris' policies and her odds against Donald Trump has prompted investors to recommend hard-hit assets in countries like Brazil, India, and Nigeria. While global events can trigger short-term volatility, long-term performance in developing assets is often more dependent on local fundamentals and policy decisions. Investors are also considering the potential for increased volatility against opportunities in markets with strong fundamentals, with US monetary policy remaining a critical factor for developing assets. [Extracted from the article]

Emerging-market investors are seeking refuge in hard-hit assets due to the uncertainty surrounding the US election. The lack of clarity on Vice President Kamala Harris securing the Democratic nomination and her policies has led investors to recommend assets in countries like Brazil, India, and Nigeria that are driven more by domestic factors than global politics. While the withdrawal of Joe Biden from the presidential race has caused some market reactions, investors are increasingly focusing on country-specific factors and local fundamentals. The Federal Reserve's monetary policy is also seen as a critical factor for developing assets. [Extracted from the article]

Investors are becoming more selective when it comes to emerging-market corporate bonds, as they anticipate a volatile second half of the year. Money managers are recommending high-yield, dollar-denominated bonds from emerging-market firms due to their shorter durations and higher credit quality compared to their host nations. Despite uncertainty surrounding the Federal Reserve's interest rate decisions and the US presidential election, emerging-market corporate bonds have outperformed sovereign bonds this year. Credit quality has also improved, leading to a decline in default rates. Investors are particularly interested in Latin America, with Mexico and Brazil being favored. [Extracted from the article]

Latin America has gone from being a favored region for emerging-market investors to their least loved in just six weeks. The main issue is politics, as leaders have proposed policy changes that investors fear will lead to overspending and instability. This has caused the profitable carry trade, which involves borrowing in a low-yielding currency to buy a high-yield currency, to result in steep losses. Countries like Mexico, Brazil, and Colombia are experiencing political and fiscal concerns that are outweighing the appeal of the carry trade. The region is also vulnerable to the impact of the US presidential election. [Extracted from the article]

Latin America has gone from being the most favored region for emerging-market investors to the least loved in just six weeks. The main issue is politics, as leaders have proposed policy changes that investors fear will lead to overspending and instability. This has caused losses for carry traders, who borrow in low-yielding currencies to buy high-yielding ones. Countries like Mexico, Brazil, and Colombia are experiencing political and fiscal challenges that are outweighing the appeal of the carry trade. The region is also vulnerable to the impact of the US presidential election. [Extracted from the article]

Hedge funds have significantly reduced their bets on the Mexican peso following an unexpected election outcome that caused market turbulence and raised concerns about the future of the currency trade. Leveraged funds decreased their net long position by 56,709 contracts, marking one of the largest reductions on record. Asset managers also scaled back their bullish wagers to the lowest level in about two years. Traders have been abandoning the profitable carry trade, which involves borrowing in lower-yielding currencies to purchase the peso, due to fears about the policies of President-elect Claudia Sheinbaum's government, including potential judicial reforms. [Extracted from the article]

Investors in emerging-market debt are once again turning to long-duration bonds after a period of avoiding them. Two months of below-estimate US inflation has revived expectations for rate cuts by the Federal Reserve, leading to a rebound in long-dated sovereign debt. Dollar-denominated emerging-market sovereign bonds with a maturity of 10 years or more have outperformed every other category since May. However, not all investors are ready to embrace this trade due to lingering economic and political uncertainties. [Extracted from the article]

Investors in emerging-market debt are once again turning to long-duration bonds after a period of avoiding them. Two months of below-estimate US inflation has revived expectations for rate cuts by the Federal Reserve, leading to a rebound in long-dated sovereign debt. Dollar-denominated emerging-market sovereign bonds with a maturity of 10 years or more have outperformed every other category since May. However, not all investors are ready to embrace this trade due to lingering economic and political uncertainties. [Extracted from the article]

Royal Bank of Canada has appointed Donald Sanya as the CEO of its US asset-management business. Sanya, who joined the bank in 2014, will take over from Mike Lee, who is retiring in July. Sanya's role will involve deepening relationships with existing clients, pursuing growth in assets from financial intermediaries, and raising awareness of RBC BlueBay Asset Management. Sanya, who is originally from Nairobi, Kenya, will be the first Black CEO of Royal Bank's US asset-management business. He has a personal interest in emerging markets and aims to expand in that area. RBC has a prominent role in emerging-markets equity strategies and has recently launched a mutual fund focused on emerging markets excluding China. Sanya's appointment reflects the bank's focus on expanding its US business. [Extracted from the article]

Royal Bank of Canada has appointed Donald Sanya as the CEO of its US asset-management business. Sanya, who joined the bank in 2014, will take over from Mike Lee, who is retiring in July. Sanya, the first Black CEO of Royal Bank's US asset-management business, plans to deepen relationships with existing clients, pursue growth in assets from financial intermediaries, and expand the firm's presence in emerging markets. The appointment reflects the bank's focus on expanding its US business, and Sanya's promotion follows the adoption of a global structure for the bank's investment-banking business. [Extracted from the article]

Pemex, Mexico's state-oil company, faced pressure from bond investors to address its poor environmental, social, and governance (ESG) record. Bondholders, including major firms like JPMorgan Chase and BlackRock, engaged in an 18-month campaign that led Pemex to unveil its first-ever sustainability plan. The plan commits Pemex to reduce emissions by 50% over the next six years and achieve net-zero emissions by 2050. While some investors remain skeptical, Pemex's willingness to meet ESG demands reflects its reliance on creditors for financial support. [Extracted from the article]

Pemex, Mexico's state-oil company, faced pressure from creditors to address its poor environmental, social, and governance (ESG) record. Bond investors, including Neuberger Berman Group, threatened to sell their holdings unless Pemex took ESG issues seriously. As a result, Pemex unveiled its first-ever sustainability plan, committing to reduce emissions and become net zero by 2050. The company's engagement with creditors highlights its reliance on their financial support, and while some investors remain skeptical, Pemex's decision to address ESG concerns demonstrates the growing influence of the ESG movement in the finance industry. [Extracted from the article]

The strategy of buying debt from low-rated countries, known as "special situations," is gaining popularity on Wall Street. Money managers like Vontobel Asset Management and Abrdn Plc have benefited from this trade, outperforming traditional emerging-market investments. Bonds from countries like Argentina, Sri Lanka, and Ukraine have seen significant returns, with the top five performers averaging a 97% return over the past year. While this strategy carries risks, such as market volatility and debt restructuring, it has become less risky in recent years. Money managers are now shifting their focus to local-currency bonds, particularly in countries like Nigeria and Egypt. However, risks remain, including the strength of the US dollar and limited liquidity for some bonds. Overall, there are still opportunities in frontier markets and high-yield emerging-market bonds. [Extracted from the article]

Money managers are still optimistic about local currency debt from developing nations, despite recent challenges. The odds of higher interest rates in the US and a strong dollar have affected emerging-market bonds, but some investors believe the trade is still attractive. Delays in rate cuts by the Federal Reserve have widened real rates in emerging economies, offering better yields for investors. While the trade has turned sour for some, early signs of a cooling US economy could potentially boost the trade and result in a weaker dollar. Investors are being cautious and selectively choosing countries with attractive yields, such as Mexico, Brazil, Egypt, and Turkey. Overall, there is still optimism among investors, although strong returns may be difficult to achieve due to headwinds in rates. [Extracted from the article]

Money managers are still optimistic about local-currency debt from developing nations, despite recent challenges. The odds of higher interest rates in the US and a strong dollar have affected emerging-market bonds, but some investors believe that the trade is still attractive. Delays in interest-rate cuts by the Federal Reserve have widened real rates in emerging economies, offering better yields for investors. While the local-currency bond trade has turned sour for some, there are still selective opportunities in countries like Mexico, Brazil, Egypt, and Turkey. [Extracted from the article]

Money managers are still optimistic about local-currency debt from developing nations, despite recent challenges. The odds of higher interest rates in the US and a strong dollar have affected emerging-market bonds, but some investors believe that the trade is still attractive. Delays in interest-rate cuts by the Federal Reserve have widened real rates in emerging economies, offering better yields for investors. While the local-currency bond trade has turned sour for some, there are still selective opportunities in countries like Mexico, Brazil, Egypt, and Turkey. [Extracted from the article]

Actively managed exchange-traded funds (ETFs) that focus on emerging markets are becoming increasingly popular among investors. While only about 5% of ETFs in the $350 billion market for developing-nation assets are actively managed, these funds have attracted over a third of new investments in the past year. The shift towards emerging-market shares is driven by the fact that these stocks are trading at a discount of about 43% compared to their US counterparts, making them appear undervalued. Investors are drawn to actively managed ETFs for their potential to outperform passive strategies and their lower fees. Avantis Investors and Dimensional Fund Advisors are two firms that have seen strong demand for their actively managed ETFs, which have lower fees and track records of outperforming benchmarks. As a result, more actively managed emerging-market ETFs are being introduced to the market. For example, the Avantis Emerging Markets ex-China Equity ETF (AVXC) was recently launched to cater to investors who want to make more targeted bets. [Extracted from the article]

Actively managed exchange-traded funds (ETFs) that focus on emerging markets are becoming increasingly popular among investors. While only about 5% of ETFs that invest in developing-nation assets are actively managed, these funds have attracted over a third of new cash flowing into the asset class in the past year. The shift towards emerging-market shares is driven by the fact that these stocks are trading at a discount of about 43% compared to their US counterparts, making them appear undervalued. Investors are drawn to actively managed ETFs for their potential to generate stronger returns and diversify portfolios. Avantis Investors and Dimensional Fund Advisors are two companies that have seen significant inflows into their actively managed emerging-market ETFs, which have lower fees and a track record of outperforming passive benchmarks. The demand for these funds has led to the launch of numerous new actively managed emerging-market ETFs in the US. [Extracted from the article]

Neuberger Berman, an asset manager, has made a significant change to its carry-trade strategy by funding positions using the Swiss franc instead of the Japanese yen. This shift comes as traders become wary of shorting the yen after the Bank of Japan raised rates and threatened intervention to support the currency. Neuberger Berman's head of global currency, Ugo Lancioni, believes that funding positive carry trades with the franc is currently favorable. The franc has lost value against the dollar since the Swiss National Bank's surprise interest-rate cut, while the yen has also declined since the Bank of Japan's rate hike. [Extracted from the article]

Lewis Kaufman, the manager of the Artisan Developing World Fund, has been praised and criticized for his investment strategy. Kaufman has achieved double-digit annual returns in emerging-market stocks by including high-flying US tech stocks in his fund. Critics argue that these tech stocks have no connection to emerging markets and are included solely to boost returns. Kaufman defends his approach, stating that these tech stocks are considered emerging-market stocks if they generate a significant portion of their revenue from developing nations. He believes that a broader approach is necessary due to poor returns from traditional emerging-market companies. Despite his success, Kaufman's fund has not attracted significant new investments. Some analysts view his fund as unconventional and not fitting the category of an emerging-market fund. Kaufman has a history of including stocks based outside of the developing world in his portfolio, which has paid off in the past. He refers to these non-emerging market companies as "passport companies" that tap into rising demand in emerging markets. While critics argue that Kaufman's strategy is misleading and that he should focus on traditional emerging-market stocks, supporters trust his approach and believe in his ability as a stock picker. Kaufman has been reducing his tech-stock holdings and diversifying into less volatile US stocks and shares in India. He emphasizes the importance of having stores of value in his emerging markets fund. [Extracted from the article]

State-owned companies in Latin America, such as Petroleos Mexicanos SA, Petroleos de Peru SA, and Chile's Codelco, are attracting bond investors by offering higher yields than their respective governments. Despite facing falling output, cash problems, and expensive investment plans, these companies are seen as low-risk investments because it is believed that their governments will not let them go under. Investors have been rewarded for betting on these companies, with their debt outperforming the average return for emerging-market credits. The willingness of Latin American governments to support these state-owned companies is notable, as they are considered investment-grade credits with lower debt-to-GDP ratios than many developed nations. [Extracted from the article]

Traders in China are purchasing options tied to US-listed exchange-traded funds (ETFs) that track Chinese equities, in the hopes that the Chinese government will stimulate a recovery in the stock market. This strategy allows investors to capture potential upside while minimizing losses. Chinese stocks have been performing poorly due to Covid lockdowns, regulatory pressure, and a property crisis. The recent spike in call options volume for ETFs focused on China suggests that some investors fear missing out on a potential rebound. [Extracted from the article]

Wall Street traders are taking longshot bets on Chinese stocks, hoping that the Chinese government will be able to stimulate a recovery. These traders are purchasing options tied to US-listed exchange-traded funds (ETFs) that track Chinese equities, which have been heavily impacted by Covid lockdowns, regulatory pressure, and a property crisis. The options provide a way for traders to potentially maximize profits while minimizing losses. The increased activity in options trading suggests that investors are paying attention to the Chinese stock market and are looking for opportunities to benefit from a potential rebound. [Extracted from the article]

Investors are increasingly optimistic about emerging-market debt as they anticipate the Federal Reserve's potential interest rate cuts. This optimism is driving a surge in domestic bond markets, particularly in Latin America, where early and aggressive monetary policy has led to a strong rally in local-currency debt. Money managers, including Grantham Mayo Van Otterloo & Co., are calling this a "once-in-a-generation" opportunity for local bonds. A potential pivot by the Fed, along with a weaker dollar, could encourage central banks in emerging markets to ease and result in a unique investment opportunity. [Extracted from the article]

Investors are increasingly turning away from China as a growth opportunity and instead investing in emerging markets outside of the country. The value of the largest exchange-traded fund (ETF) focused on developing stocks outside of China has risen by almost 50% in the past two months, surpassing the largest ETF dedicated to Chinese stocks. This shift is expected to continue, with stock markets in India, Brazil, and Mexico reaching record highs while China's benchmark index has fallen. Latin America is particularly favored by investors, with countries like Mexico, Brazil, and Chile trading at historically low valuations. On the other hand, China is being removed from many emerging-market portfolios, with investors looking to countries like India, Saudi Arabia, and Mexico for growth prospects. Concerns about geopolitical tensions, regulatory risks, and state interference are deterring investors from China. Brazil and Mexico are also benefiting from interest rate cuts and the relocation of supply chains closer to the US. Overall, Latin America is seen as an attractive region for investment due to its macro stability and strong returns. [Extracted from the article]

Defiance ETFs has launched the world's first exchange-traded fund (ETF) that tracks Israeli bonds, called the Defiance Israel Bond ETF. The ETF tracks bonds issued by the Israeli government, government-related entities, and local companies. This launch is in response to increased demand from retail investors for specialized bets within emerging markets and interest in Israel's technology industry. Despite the ongoing conflict between Hamas and Israel and the potential downgrade of Israeli bonds by Moody's, investors are still interested in this exposure. [Extracted from the article]