Rebounds to come Rebounds to come\images\insights\video\businessman-drawing-graph-small.jpg January 4 2023 December 13 2022

Rebounds to come

Pessimistic markets are pricing in low recovery conditions.

Published December 13 2022
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Video Transcript
Question: What emerging market regions offer the best opportunities?
Ihab Salib: One area in emerging markets that really got hit hard this year with the risk-off environment is the EM high-yield sector. So some of the frontier markets and some of the lower rated credits within EM. We think the markets are pricing in scenarios of much higher default probability, and much lower recovery conditions. So, we think that's too pessimistic, and we think that if there's an area that you're likely to see a rebound, will be in that area. Secondly, I think the economies that are more diversified, and that are not necessarily reliant on just one commodity, like Brazil for example, are likely to do well in the coming months, and next year as well.
Tags Fixed Income . Markets/Economy . International/Global .

Views are as of the date above and are subject to change based on market conditions and other factors. These views should not be construed as a recommendation for any specific security or sector.

International investing involves special risks including currency risk, increased volatility, political risks, and differences in auditing and other financial standards.

Prices of emerging-markets securities can be significantly more volatile than the prices of securities in developed countries and currency risk and political risks are accentuated in emerging markets.

High-yield, lower-rated securities generally entail greater market, credit/default and liquidity risks and may be more volatile than investment-grade securities.

Federated Investment Management Company