While the exceptionally low volatility we saw in mid-2014 is not likely to return, history has demonstrated that after the initial rate rise or liquidity withdrawal, risk premiums tend to recede again, capitalising on the growth that ensues.
With that in mind, the generally solid economic fundamentals and carry advantage of emerging markets debt should make them competitive versus other fixed income asset classes in the year ahead.
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Kaan Nazli is senior economist for emerging markets debt at Neuberger Berman
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