Emerging market sovereign debt as part of an asset allocation

Dr Michael Hasenstab, Elsa Goldberg & Joshua Yafa | Franklin Templeton | 14 September 2011

We believe the aftermath of the Global Financial Crisis is likely to have significant implications for the perception of relative risk in global financial markets. Traditionally, emerging markets have been viewed as riskier investment locales than their advanced-economy counterparts. As a result, emerging markets historically have tended to compensate investors for the perceived incremental risk with higher returns. However, the deterioration of s...