{"id":601399,"date":"2019-02-27T04:01:18","date_gmt":"2019-02-27T04:01:18","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2019\/02\/27\/risky-em-debt-pays-over-the-long-term-if-you-can-brave-the-prospect-of-default\/"},"modified":"2019-02-27T04:01:18","modified_gmt":"2019-02-27T04:01:18","slug":"risky-em-debt-pays-over-the-long-term-if-you-can-brave-the-prospect-of-default","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2019\/02\/27\/risky-em-debt-pays-over-the-long-term-if-you-can-brave-the-prospect-of-default\/","title":{"rendered":"Risky EM debt pays over the long term \u2014 if you can brave the prospect of default"},"content":{"rendered":"<p><a class=\"content-anchor\" id=\"tldr-story-07\"><\/a> <b>Risky EM debt pays over the long term \u2014 if you can brave the prospect of default: <\/b>Bondholders expose themselves to greater risk of default by investing in emerging market debt, but defaults aren\u2019t necessarily a bad thing if you\u2019re a long-term investor, <a href=\"https:\/\/www.wsj.com\/articles\/defaults-hurt-but-emerging-debt-still-wins-in-the-long-run-11551186002\">James Mackintosh writes in the WSJ<\/a>. <a href=\"http:\/\/enterprise.press\/wp-content\/uploads\/2019\/02\/w25543.pdf\">New research examining<\/a> bond issuances since 1815 finds that average returns on bonds issued by governments in GBP or USD rival those of US stocks and are less volatile. The higher yields attached to junk bonds deliver even greater returns, even if the country defaults and investors are forced to take losses. Many bonds stage a speedy recovery following default, paying returns that more than compensate for the haircut.<\/p>\n<p><b>Argentina is a case in point.<\/b> The study finds that bonds issued by Argentina (which has spent around a third of its 124-year-old history in default) actually paid 5.6% higher returns on average than low-yielding Gilts and US Treasuries, despite the losses suffered by investors after default.<\/p>\n<p><b>Long-term investors can ride out the storm: <\/b>\u201cTruly long-term investors who can lend for decades without worrying should make a decent return, punctuated by awful periods of loss,\u201d Macintosh writes. And for the rest of us who aren\u2019t in it for the long haul? \u201cEveryone else has to worry about the boom-bust cycle.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Risky EM debt pays over the long term \u2014 if you can brave the prospect of default: Bondholders expose themselves to greater risk of default by investing in emerging market debt, but defaults aren\u2019t necessarily a bad thing if you\u2019re a long-term investor, James Mackintosh writes in the WSJ. New research examining bond issuances since [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":601400,"comment_status":"closed","ping_status":"open","sticky":false,"template":"single-feature.php","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[9272],"tags":[82,115,72,1510],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-601399","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-macro-picture","tag-bonds","tag-emerging-markets","tag-enterpriseam","tag-the-macro-picture","wpautop","entry"],"acf":{"mongo_id":"d60b8583-eecd-4d88-a04e-403a3c973610","is_powered_by":true,"story_type":"1","photo_url":"https:\/\/ent.news\/2019\/2\/649.jpg","photo_position":"above","related_issue":[601379],"teaser":"","voice_url":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.1 (Yoast SEO v27.1.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Risky EM debt pays over the long term \u2014 if you can brave the prospect of default - EnterpriseAM Egypt<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterpriseam.com\/egypt\/2019\/02\/27\/risky-em-debt-pays-over-the-long-term-if-you-can-brave-the-prospect-of-default\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Risky EM debt pays over the long term \u2014 if you can brave the prospect of default\" \/>\n<meta property=\"og:description\" content=\"Risky EM debt pays over the long term \u2014 if you can brave the prospect of default: Bondholders expose themselves to greater risk of default by investing in emerging market debt, but defaults aren\u2019t necessarily a bad thing if you\u2019re a long-term investor, James Mackintosh writes in the WSJ. 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Foreign investors have been exiting emerging-market assets in droves in recent months, with rising inflation, the Federal Reserve hiking rates, a strengthening USD, supply chain issues, a war in Europe's\u2026","rel":"","context":"In &quot;THE MACRO PICTURE&quot;","block_context":{"text":"THE MACRO PICTURE","link":"https:\/\/enterpriseam.com\/egypt\/category\/the-macro-picture\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2022\/8\/618.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":565398,"url":"https:\/\/enterpriseam.com\/egypt\/2021\/04\/06\/growing-global-debt-pile-could-lead-to-market-shock-down-the-line\/","url_meta":{"origin":601399,"position":3},"title":"Growing global debt pile could lead to market shock down the line","author":"enterpriseam admin","date":"6 April 2021","format":false,"excerpt":"Central bankers may have righted the ship, but investors are struggling to find returns and diversify their portfolios as stimulus distorts markets and fuels more debt, John Plender writes in this piece for the Financial Times.Risk perception is out of whack: As ultra-low interest rates and stimulus squash bonds yields,\u2026","rel":"","context":"In &quot;Macro picture&quot;","block_context":{"text":"Macro picture","link":"https:\/\/enterpriseam.com\/egypt\/category\/explainers\/macro-picture\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/internal\/536550.png?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]},{"id":575512,"url":"https:\/\/enterpriseam.com\/egypt\/2020\/10\/18\/foreign-debt-is-leaving-emerging-markets-more-vulnerable-to-shocks-than-ever-before\/","url_meta":{"origin":601399,"position":4},"title":"Foreign debt is leaving emerging markets more vulnerable to shocks than ever before","author":"enterpriseam admin","date":"18 October 2020","format":false,"excerpt":"Foreign debt is leaving emerging markets more vulnerable to shocks than ever before: Widening private debt, rapid monetary expansion and low-cost lending have left emerging markets with a much larger challenge in piecing together an economic recovery from covid-19 than they did during the global financial crisis, according to a\u2026","rel":"","context":"In &quot;THE MACRO PICTURE&quot;","block_context":{"text":"THE MACRO PICTURE","link":"https:\/\/enterpriseam.com\/egypt\/category\/the-macro-picture\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2020\/10\/182.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":591667,"url":"https:\/\/enterpriseam.com\/egypt\/2019\/12\/12\/how-do-analysts-feel-about-emerging-markets-going-into-2020\/","url_meta":{"origin":601399,"position":5},"title":"How do analysts feel about emerging markets going into 2020?","author":"enterpriseam admin","date":"12 December 2019","format":false,"excerpt":"How do analysts feel about emerging markets going into 2020? Emerging markets are set to outperform developed markets in 2020, predict 57 global investors, traders and strategists in a Bloomberg survey, with all assets \u2014 currencies, stocks, and bonds \u2014 having rallied this year after 2018\u2019s EM Zombie Apocalypse. Total\u2026","rel":"","context":"In &quot;THE MACRO PICTURE&quot;","block_context":{"text":"THE MACRO PICTURE","link":"https:\/\/enterpriseam.com\/egypt\/category\/the-macro-picture\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2019\/12\/2354.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]}],"_links":{"self":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts\/601399","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/comments?post=601399"}],"version-history":[{"count":0,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/posts\/601399\/revisions"}],"acf:post":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/issue\/601379"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/media\/601400"}],"wp:attachment":[{"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/media?parent=601399"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/categories?post=601399"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/tags?post=601399"},{"taxonomy":"brand","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/brand?post=601399"},{"taxonomy":"newspack_spnsrs_tax","embeddable":true,"href":"https:\/\/enterpriseam.com\/egypt\/wp-json\/wp\/v2\/newspack_spnsrs_tax?post=601399"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}