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Investors Are Flocking to Emerging-Markets Bonds

December 10, 2010

Dissatisfaction with low interest rates and sluggish growth in the developed world is luring bond investors to emerging markets. But do the risks outweigh the rewards?

By Laurie Kaplan Singh

Dissatisfaction with low interest rates and sluggish growth in the developed world is luring bond investors to emerging markets. In the first ten months of this year, the 929 emerging-markets bond funds tracked by Cambridge, Massachusetts–based EPFR Global pulled in $49.5 billion in new assets. That’s more than five times the $9.5 billion they received in 2009 and 52 percent of total emerging-markets bond fund assets.

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