Challenges and Solutions to the Cost of Investing in Emerging Markets Local Debt
In an environment of expanding negative rate securities across developed markets, emerging markets local bonds (EMLBs) continue to present attractive investment opportunities. Yet, unless active measures are taken, investing in EMLBs can incur extra transaction costs that reduce alpha generation. In this paper, PGIM Fixed Income explains the transaction costs associated with EMLBs and discusses possible solutions to help mitigate, and in some cases, eliminate these costs in order to maximize the returns of client portfolios.