[et_pb_section fb_built=”1″ _builder_version=”4.16″ global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_row _builder_version=”4.27.4″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_column type=”4_4″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||” theme_builder_area=”post_content”][et_pb_text content_tablet=”<\/p>\n
The question arises: where to put the money? We show you a niche segment in which high single-digit returns can still be achieved on corporate bonds. <\/h2>\n
” content_phone=”<\/p>\n
The question arises: where to put the money? We show you a niche segment in which returns in the high single-digit range can still be achieved with corporate bonds. <\/h2>\n
” content_last_edited=”off|desktop” _builder_version=”4.27.7″ text_font=”Celias – medium||||||||” text_font_size=”21px” header_2_font_size=”25px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_margin=”||20px||false|false” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″]<\/p>\n
Investing in Times of Convergence and Regime Change<\/p>\n
[\/et_pb_text][et_pb_divider divider_weight=”2px” _builder_version=”4.27.4″ _module_preset=”default” custom_margin=”||0px||false|false” global_colors_info=”{}” theme_builder_area=”post_content”][\/et_pb_divider][et_pb_text content_tablet=”<\/p>\n
The question arises: where to put the money? We show you a niche segment in which high single-digit returns can still be achieved on corporate bonds. <\/h2>\n
” content_phone=”<\/p>\n
The question arises: where to put the money? We show you a niche segment in which returns in the high single-digit range can still be achieved with corporate bonds. <\/h2>\n
” content_last_edited=”off|desktop” _builder_version=”4.27.7″ text_font_size=”21px” header_2_font_size=”25px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_margin=”||10px||false|false” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″]<\/p>\n
The Blurring Lines Between Developed and Emerging Markets<\/p>\n
[\/et_pb_text][et_pb_text content_tablet=”<\/p>\n
The question arises: where to put the money? We show you a niche segment in which high single-digit returns can still be achieved on corporate bonds. <\/h2>\n
” content_phone=”<\/p>\n
The question arises: where to put the money? We show you a niche segment in which returns in the high single-digit range can still be achieved with corporate bonds. <\/h2>\n
” content_last_edited=”off|desktop” _builder_version=”4.27.4″ header_2_font_size=”25px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n
The traditional segmentation of credit markets into developed markets (DM) and emerging markets (EM) is becoming increasingly inadequate for today\u2019s market structures. While countries such as Poland, South Korea, and Chile are achieving institutional standards comparable to or superior to those of Southern Europe, parts of the developed world have abandoned fiscal discipline or orthodox monetary policy. In terms of many fundamental metrics\u2014debt ratios, fiscal stability, and governance indicators\u2014numerous emerging markets have caught up with or even surpassed the DM over the past three decades. <\/p>\n
For institutional investors, this has two implications: The diversification benefits of traditional emerging market allocations have declined significantly. However, despite this convergence, risk premiums in emerging markets remain structurally higher\u2014a source of alpha that is difficult to capture using traditional benchmark approaches. <\/p>\n
[\/et_pb_text][et_pb_text content_tablet=”<\/p>\n
The question arises: where to put the money? We show you a niche segment in which high single-digit returns can still be achieved on corporate bonds. <\/h2>\n
” content_phone=”<\/p>\n
The question arises: where to put the money? We show you a niche segment in which returns in the high single-digit range can still be achieved with corporate bonds. <\/h2>\n
” content_last_edited=”off|desktop” _builder_version=”4.27.7″ text_font_size=”21px” header_2_font_size=”25px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_margin=”||10px||false|false” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″]<\/p>\n
The Traditional Worldview of the Capital Markets<\/p>\n
[\/et_pb_text][et_pb_text content_tablet=”<\/p>\n
The question arises: where to put the money? We show you a niche segment in which high single-digit returns can still be achieved on corporate bonds. <\/h2>\n
” content_phone=”<\/p>\n
The question arises: where to put the money? We show you a niche segment in which returns in the high single-digit range can still be achieved with corporate bonds. <\/h2>\n
” content_last_edited=”off|desktop” _builder_version=”4.27.4″ header_2_font_size=”25px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n
The bond indices\u2019 view of the world is binary. On one side are the developed markets\u2014stable, legally secure, and reliable; on the other are the emerging markets\u2014volatile, risky, and up-and-coming. This dichotomy shapes not only the rhetoric of investment committees but also the concrete structures of institutional portfolios: separate mandates for \u201cemerging markets,\u201d dedicated risk budgets, and flat-rate capital add-ons under Solvency II. <\/p>\n
The problem is this: These assumptions no longer hold true today. The EM category has become so heterogeneous over the past three decades that it has effectively lost its significance as a uniform asset class. At the same time, the institutional quality of some developed markets has deteriorated\u2014not dramatically, but measurably. The cause of the persistent premiums lies not in poorer fundamental data quality, but in traditional labeling and categories that have evolved through regulation and no longer align with actual risk dynamics. <\/p>\n
[\/et_pb_text][et_pb_text content_tablet=”<\/p>\n
The question arises: where to put the money? We show you a niche segment in which high single-digit returns can still be achieved on corporate bonds. <\/h2>\n
” content_phone=”<\/p>\n
The question arises: where to put the money? We show you a niche segment in which returns in the high single-digit range can still be achieved with corporate bonds. <\/h2>\n
” content_last_edited=”off|desktop” _builder_version=”4.27.7″ text_font_size=”21px” header_2_font_size=”25px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_margin=”||10px||false|false” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″]<\/p>\n
Aggregate Convergence<\/p>\n
[\/et_pb_text][et_pb_text content_tablet=”<\/p>\n
The question arises: where to put the money? We show you a niche segment in which high single-digit returns can still be achieved on corporate bonds. <\/h2>\n
” content_phone=”<\/p>\n
The question arises: where to put the money? We show you a niche segment in which returns in the high single-digit range can still be achieved with corporate bonds. <\/h2>\n
” content_last_edited=”off|desktop” _builder_version=”4.27.4″ header_2_font_size=”25px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n
The convergence in institutional quality between developed and emerging markets has been a structural trend over the past three decades. The World Bank\u2019s Worldwide Governance Indicator for the rule of law measures the extent to which actors trust and adhere to social norms\u2014specifically, the quality of contract enforcement, property rights, the police, and the courts, as well as the likelihood of crime and violence. <\/p>\n
[\/et_pb_text][et_pb_text content_tablet=”<\/p>\n
The question arises: where to put the money? We show you a niche segment in which high single-digit returns can still be achieved on corporate bonds. <\/h2>\n
” content_phone=”<\/p>\n
The question arises: where to put the money? We show you a niche segment in which returns in the high single-digit range can still be achieved with corporate bonds. <\/h2>\n
” content_last_edited=”off|desktop” _builder_version=”4.27.7″ text_font=”Celias – medium||||||||” text_font_size=”21px” header_2_font_size=”25px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_margin=”||10px||false|false” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″]<\/p>\n
Difference in Rule of Law Scores Between Developed and Emerging Markets<\/p>\n
[\/et_pb_text][et_pb_image src=”https:\/\/ha-gim.com\/wp-content\/uploads\/2025\/12\/Chart-1.png” alt=”Interest rate differential between US and German government bonds ” title_text=”Chart 1″ align=”center” _builder_version=”4.27.4″ _module_preset=”default” width=”80%” module_alignment=”center” custom_padding=”|0px||||” global_colors_info=”{}” theme_builder_area=”post_content”][\/et_pb_image][et_pb_text _builder_version=”4.27.4″ _module_preset=”default” text_font_size=”12px” text_line_height=”1.4em” custom_margin=”-10px||29px|||” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n
Fig. 1: Aggregate institutional convergence. Difference in rule-of-law scores between developed and emerging markets (median DM minus median EM), indexed to 100 (base year 1996). The decline to approximately 91 over 27 years illustrates the structural convergence. Source: World Bank Worldwide Governance Indicators, author\u2019s calculations. <\/em><\/p>\n [\/et_pb_text][et_pb_text content_tablet=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which high single-digit returns can still be achieved on corporate bonds. <\/h2>\n ” content_phone=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which returns in the high single-digit range can still be achieved with corporate bonds. <\/h2>\n ” content_last_edited=”off|desktop” _builder_version=”4.27.4″ header_2_font_size=”25px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n The gap between the average score of developed markets and that of emerging markets has narrowed by about nine percent since 1996. What once fundamentally distinguished developed markets from emerging markets\u2014the reliability of legal institutions, the enforceability of contracts, and the protection of property rights\u2014has, to some extent, dissipated over the course of a generation. <\/p>\n This convergence is not due to a single cause. On the one hand, many emerging economies have implemented institutional reforms driven by the need to attract international capital. Poland and the Czech Republic benefited from the European Union\u2019s accession criteria. South Korea has continuously invested in the quality of its judiciary and the independence of its regulatory agencies over the course of four decades. <\/p>\n On the other hand, developed markets are showing measurable signs of erosion. Italy and Greece experienced a loss of confidence during the euro crisis. The United States is experiencing political polarization and recurring dramas surrounding the debt ceiling, which have reduced the predictability of economic policy. <\/p>\n [\/et_pb_text][et_pb_text content_tablet=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which high single-digit returns can still be achieved on corporate bonds. <\/h2>\n ” content_phone=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which returns in the high single-digit range can still be achieved with corporate bonds. <\/h2>\n ” content_last_edited=”off|desktop” _builder_version=”4.27.7″ text_font_size=”21px” header_2_font_size=”25px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_margin=”||10px||false|false” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″]<\/p>\n The Overlap of Levels<\/p>\n [\/et_pb_text][et_pb_text content_tablet=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which high single-digit returns can still be achieved on corporate bonds. <\/h2>\n ” content_phone=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which returns in the high single-digit range can still be achieved with corporate bonds. <\/h2>\n ” content_last_edited=”off|desktop” _builder_version=”4.27.4″ header_2_font_size=”25px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n However, looking at the median masks a crucial insight: trends within both categories are extremely heterogeneous. A cluster analysis of rule-of-law scores over the period from 1996 to 2023 shows that the levels now overlap\u2014with far-reaching implications for portfolio construction. <\/p>\n [\/et_pb_text][et_pb_text content_tablet=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which high single-digit returns can still be achieved on corporate bonds. <\/h2>\n ” content_phone=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which returns in the high single-digit range can still be achieved with corporate bonds. <\/h2>\n ” content_last_edited=”off|desktop” _builder_version=”4.27.4″ text_font=”Celias – medium||||||||” text_font_size=”21px” header_2_font_size=”25px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_margin=”||10px||false|false” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n Trends in Rule of Law Scores by Country Group (1998\u20132023)<\/p>\n [\/et_pb_text][et_pb_image src=”https:\/\/ha-gim.com\/wp-content\/uploads\/2025\/12\/Chart-2.png” alt=”Interest rate differential between US and German government bonds ” title_text=”Chart 2″ align=”center” _builder_version=”4.27.4″ _module_preset=”default” width=”80%” module_alignment=”center” custom_padding=”|0px||||” global_colors_info=”{}” theme_builder_area=”post_content”][\/et_pb_image][et_pb_text _builder_version=”4.27.4″ _module_preset=”default” text_font_size=”12px” text_line_height=”1.4em” custom_margin=”-10px||29px|||” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n Fig. 2: Overlapping Levels. Trends in Rule of Law Scores by Country Group (1998\u20132023). It is not only the top performers among emerging markets (Poland, South Korea, Chile, the Czech Republic, and the Baltic states) that have reached levels comparable to or superior to those of core developed market countries. At the same time, some developed markets (Italy, Greece) are showing concerning downward trends. Source: World Bank Worldwide Governance Indicators, own calculations. <\/em><\/p>\n [\/et_pb_text][et_pb_text content_tablet=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which high single-digit returns can still be achieved on corporate bonds. <\/h2>\n ” content_phone=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which returns in the high single-digit range can still be achieved with corporate bonds. <\/h2>\n ” content_last_edited=”off|desktop” _builder_version=”4.27.4″ header_2_font_size=”25px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n The chart shows two findings that are relevant for asset allocators: Second, some developed markets are showing concerning trends. Italy, Greece, and Malta are exhibiting a measurable downward trend in institutional quality. This erosion is not reflected in traditional asset allocation models\u2014a Polish issuer is subject to higher capital requirements than an Italian one, even though the fundamentals suggest the opposite. <\/p>\n [\/et_pb_text][et_pb_text content_tablet=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which high single-digit returns can still be achieved on corporate bonds. <\/h2>\n ” content_phone=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which returns in the high single-digit range can still be achieved with corporate bonds. <\/h2>\n ” content_last_edited=”off|desktop” _builder_version=”4.27.7″ text_font_size=”21px” header_2_font_size=”25px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_margin=”||10px||false|false” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″]<\/p>\n The Implications for Portfolio Construction<\/p>\n [\/et_pb_text][et_pb_text content_tablet=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which high single-digit returns can still be achieved on corporate bonds. <\/h2>\n ” content_phone=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which returns in the high single-digit range can still be achieved with corporate bonds. <\/h2>\n ” content_last_edited=”off|desktop” _builder_version=”4.27.4″ header_2_font_size=”25px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n This reality should be reflected in sensible portfolio constructions. The traditional approach\u2014treating emerging markets as a separate risk allocation with its own beta\u2014leads to two problems: Polish corporate bonds now correlate more strongly with German bonds than with Brazilian ones. The reason is obvious: Polish companies are an integral part of German and European supply chains. Anyone who keeps Poland in the EM bucket is constructing a beta that does not reflect the actual risk drivers. <\/p>\n Das zweite Problem betrifft die Alpha-Erschlie\u00dfung. Trotz der fundamentalen Konvergenz bleiben die Risikopr\u00e4mien in EM strukturell h\u00f6her. Die Gr\u00fcnde sind nicht fundamental, sondern strukturell: Mandate sind entlang der EM\/DM-Grenze organisiert, Index-Provider gewichten nach historischen Kriterien, Solvency II behandelt EM pauschal mit h\u00f6heren Kapitalanforderungen. Das Ergebnis ist eine systematische Fehlbewertung: Rating-\u00e4quivalente EM-Emittenten handeln mit h\u00f6heren Spreads als DM-Emittenten, obwohl die Fundamentaldaten vergleichbar oder besser sind. <\/p>\n This source of alpha is difficult to capture using traditional benchmarking approaches. A manager with a separate EM mandate does not compete directly with a EUR-IG manager for capital. This artificial separation prevents direct comparison: a Polish utility company versus an Italian utility company, a South Korean technology conglomerate versus an American semiconductor manufacturer. <\/p>\n [\/et_pb_text][et_pb_text content_tablet=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which high single-digit returns can still be achieved on corporate bonds. <\/h2>\n ” content_phone=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which returns in the high single-digit range can still be achieved with corporate bonds. <\/h2>\n ” content_last_edited=”off|desktop” _builder_version=”4.27.7″ text_font_size=”21px” header_2_font_size=”25px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_margin=”||10px||false|false” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″]<\/p>\n Clean Beta, New Alpha<\/p>\n [\/et_pb_text][et_pb_text content_tablet=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which high single-digit returns can still be achieved on corporate bonds. <\/h2>\n ” content_phone=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which returns in the high single-digit range can still be achieved with corporate bonds. <\/h2>\n ” content_last_edited=”off|desktop” _builder_version=”4.27.4″ header_2_font_size=”25px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n This gives rise to specific requirements for modern portfolio construction: To tap into alpha, this artificial distinction must be overcome. Those who focus on credit quality and cash flow structure\u2014regardless of whether an issuer is classified as \u201cEM\u201d or \u201cDM\u201d\u2014can capitalize on the structural inefficiencies arising from this outdated categorization. This requires integrated mandates that enable direct comparison, as well as a willingness to consistently evaluate issuers based on fundamental criteria. <\/p>\n [\/et_pb_text][et_pb_text content_tablet=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which high single-digit returns can still be achieved on corporate bonds. <\/h2>\n ” content_phone=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which returns in the high single-digit range can still be achieved with corporate bonds. <\/h2>\n ” content_last_edited=”off|desktop” _builder_version=”4.27.7″ text_font_size=”21px” header_2_font_size=”25px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_margin=”||10px||false|false” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″]<\/p>\n The Limitations of the Thesis<\/p>\n [\/et_pb_text][et_pb_text content_tablet=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which high single-digit returns can still be achieved on corporate bonds. <\/h2>\n ” content_phone=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which returns in the high single-digit range can still be achieved with corporate bonds. <\/h2>\n ” content_last_edited=”off|desktop” _builder_version=”4.27.4″ header_2_font_size=”25px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n As convincing as the argument may be, it has its limits. Investing in emerging markets remains a matter of selection. Even for established emerging markets, sovereign risks can never be completely eliminated. South Korea is located in a geopolitically sensitive region. Chile has experienced social unrest. These risks are real and require ongoing analysis. <\/p>\n This leaves asset allocators with two options: <\/p>\n [\/et_pb_text][et_pb_divider divider_weight=”2px” _builder_version=”4.27.4″ _module_preset=”default” width=”100%” module_alignment=”left” custom_margin=”-15px||0px||false|false” global_colors_info=”{}” theme_builder_area=”post_content”][\/et_pb_divider][et_pb_text content_tablet=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which high single-digit returns can still be achieved on corporate bonds. <\/h2>\n ” content_phone=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which returns in the high single-digit range can still be achieved with corporate bonds. <\/h2>\n ” content_last_edited=”off|desktop” _builder_version=”4.27.7″ text_font_size=”21px” header_2_font_size=”25px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_margin=”||10px||false|false” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″]<\/p>\n Conclusion<\/p>\n [\/et_pb_text][et_pb_text content_tablet=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which high single-digit returns can still be achieved on corporate bonds. <\/h2>\n ” content_phone=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which returns in the high single-digit range can still be achieved with corporate bonds. <\/h2>\n ” content_last_edited=”off|desktop” _builder_version=”4.27.7″ header_2_font_size=”25px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″]<\/p>\n The binary distinction between emerging and developed markets, which has shaped asset allocations for decades, no longer reflects reality. The empirical evidence is clear: some emerging markets have reached institutional levels comparable to those of the German mark. Some developed markets are showing alarming signs of erosion. The levels overlap. <\/p>\n This reality calls for an adjustment to portfolio construction. Investors who continue to treat emerging markets as a homogeneous risk allocation are constructing an imprecise beta and squandering alpha. By contrast, investors who combine risk drivers rather than regions and evaluate issuers based on credit quality rather than labels can take advantage of the structural inefficiencies arising from this outdated distinction. <\/p>\n This requires deeper analysis and the courage to think beyond formal categories. But it is the logical path to constructing clear exposures in a world of blurring boundaries and capturing risk premiums that are structurally too high. <\/p>\n [\/et_pb_text][et_pb_divider divider_weight=”2px” _builder_version=”4.27.4″ _module_preset=”default” width=”100%” module_alignment=”left” custom_margin=”-5px||25px||false|false” global_colors_info=”{}” theme_builder_area=”post_content”][\/et_pb_divider][et_pb_text content_tablet=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which high single-digit returns can still be achieved on corporate bonds. <\/h2>\n ” content_phone=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which returns in the high single-digit range can still be achieved with corporate bonds. <\/h2>\n ” content_last_edited=”off|desktop” _builder_version=”4.27.7″ text_font_size=”21px” header_2_font_size=”25px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_margin=”||10px||false|false” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″]<\/p>\n What does this mean for our CIO Series?<\/p>\n [\/et_pb_text][et_pb_text content_tablet=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which high single-digit returns can still be achieved on corporate bonds. <\/h2>\n ” content_phone=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which returns in the high single-digit range can still be achieved with corporate bonds. <\/h2>\n ” content_last_edited=”off|desktop” _builder_version=”4.27.4″ header_2_font_size=”25px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_margin=”||5px||false|false” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n We move beyond formal categories and focus on credit quality, cash flow structure, and investment objectives\u2014regardless of whether an issuer is classified as \u201cEM\u201d or \u201cDM.\u201d<\/p>\n Our modular platform takes advantage of the structural inefficiencies that arise from this outdated separation:<\/p>\n [\/et_pb_text][et_pb_text content_tablet=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which high single-digit returns can still be achieved on corporate bonds. <\/h2>\n ” content_phone=”<\/p>\n The question arises: where to put the money? We show you a niche segment in which returns in the high single-digit range can still be achieved with corporate bonds. <\/h2>\n ” content_last_edited=”off|desktop” _builder_version=”4.27.4″ header_2_font_size=”25px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n .1. Quality: 2. Diversification: 3. Predictability: [\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.27.4″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_column type=”4_4″ _builder_version=”4.27.4″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_divider divider_weight=”2px” _builder_version=”4.27.4″ _module_preset=”default” custom_margin=”30px||5px||false|false” global_colors_info=”{}” theme_builder_area=”post_content”][\/et_pb_divider][et_pb_text _builder_version=”4.27.4″ _module_preset=”default” text_font=”Celias – medium||||||||” text_font_size=”25px” text_line_height=”1.4em” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n Learn more about the HAGIM CIO Series here:<\/p>\n [\/et_pb_text][et_pb_button button_url=”@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF9saW5rX3VybF9wYWdlIiwic2V0dGluZ3MiOnsicG9zdF9pZCI6IjM5MTgifX0=@” url_new_window=”on” button_text=”Explore further” button_alignment=”center” _builder_version=”4.27.4″ _dynamic_attributes=”button_url” _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][\/et_pb_button][et_pb_divider divider_weight=”2px” _builder_version=”4.27.4″ _module_preset=”default” custom_margin=”30px||||false|false” global_colors_info=”{}” theme_builder_area=”post_content”][\/et_pb_divider][et_pb_text _builder_version=”4.27.4″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.25.2″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_row _builder_version=”4.25.2″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_column type=”4_4″ _builder_version=”4.25.2″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_toggle title=”Risks” open_toggle_background_color=”RGBA(255,255,255,0)” closed_toggle_background_color=”RGBA(255,255,255,0)” icon_color=”#000000″ open_icon_color=”#000000″ _builder_version=”4.27.4″ _module_preset=”default” border_width_all=”0px” border_width_bottom=”1px” border_color_bottom=”#93642e” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n Price losses due to increases in yields and\/or higher risk premiums are possible. A total loss cannot be ruled out either. <\/span><\/p>\n Past performance is not an indication of future results, nor can future performance be guaranteed.<\/span> <\/p>\n [\/et_pb_toggle][et_pb_toggle title=”Disclaimer” open_toggle_background_color=”RGBA(255,255,255,0)” closed_toggle_background_color=”RGBA(255,255,255,0)” icon_color=”#000000″ open_icon_color=”#000000″ _builder_version=”4.27.4″ _module_preset=”default” border_width_all=”0px” border_width_bottom=”1px” border_color_bottom=”#93642e” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n This marketing communication within the meaning of the German Securities Trading Act [\/et_pb_toggle][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" The traditional segmentation of credit markets into developed markets (DM) and emerging markets (EM) is becoming increasingly out of step with today’s market structures.<\/p>\n","protected":false},"author":2,"featured_media":6711,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","_seopress_robots_follow":"","_seopress_robots_imageindex":"","_seopress_robots_snippet":"","_seopress_robots_primary_cat":"none","_seopress_robots_breadcrumbs":"","_seopress_robots_freeze_modified_date":"","_seopress_robots_custom_modified_date":"","_seopress_robots_canonical":"","_seopress_social_fb_title":"","_seopress_social_fb_desc":"","_seopress_social_fb_img":"","_seopress_social_fb_img_attachment_id":0,"_seopress_social_fb_img_width":0,"_seopress_social_fb_img_height":0,"_seopress_social_twitter_title":"","_seopress_social_twitter_desc":"","_seopress_social_twitter_img":"","_seopress_social_twitter_img_attachment_id":0,"_seopress_social_twitter_img_width":0,"_seopress_social_twitter_img_height":0,"_seopress_redirections_value":"","_seopress_redirections_enabled":"","_seopress_redirections_enabled_regex":"","_seopress_redirections_logged_status":"both","_seopress_redirections_param":"","_seopress_redirections_type":301,"_seopress_analysis_target_kw":"","_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[38,1,34],"tags":[],"class_list":["post-8208","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-emerging-markets","category-nicht-kategorisiert","category-specialist-article"],"_links":{"self":[{"href":"https:\/\/ha-gim.com\/en\/wp-json\/wp\/v2\/posts\/8208","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ha-gim.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ha-gim.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ha-gim.com\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/ha-gim.com\/en\/wp-json\/wp\/v2\/comments?post=8208"}],"version-history":[{"count":2,"href":"https:\/\/ha-gim.com\/en\/wp-json\/wp\/v2\/posts\/8208\/revisions"}],"predecessor-version":[{"id":8210,"href":"https:\/\/ha-gim.com\/en\/wp-json\/wp\/v2\/posts\/8208\/revisions\/8210"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ha-gim.com\/en\/wp-json\/wp\/v2\/media\/6711"}],"wp:attachment":[{"href":"https:\/\/ha-gim.com\/en\/wp-json\/wp\/v2\/media?parent=8208"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ha-gim.com\/en\/wp-json\/wp\/v2\/categories?post=8208"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ha-gim.com\/en\/wp-json\/wp\/v2\/tags?post=8208"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
First, the top institutional performers among emerging markets\u2014Poland, South Korea, Taiwan, Chile, the Czech Republic, the Baltic states, and Uruguay\u2014have reached levels comparable to those of established core developed markets. Poland is an EU member, fully integrated into German value chains, and holds an A rating from Standard & Poor\u2019s\u2014one notch higher than Italy. These countries are technically emerging markets, but institutionally, they have long since arrived. <\/p>\nThe risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The first problem concerns the beta construction. Those who allocate to EM without differentiation are, in reality, buying a heterogeneous mix of institutionally mature countries like Poland, classic emerging markets like Brazil, and fragile states like Nigeria. These countries have fundamentally different risk drivers, yet they are lumped together under a single beta. The result is an imprecise exposure that delivers neither the diversification one expects nor the risk premium one deserves. <\/p>\nThe risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
To ensure a clean beta, risk drivers must be correctly assigned. Institutionally established emerging markets such as Poland or South Korea belong in the same risk budget as comparable developed-market issuers. Traditional emerging markets such as Brazil or Mexico constitute a separate exposure with their own risk drivers. The formal category is secondary\u2014what matters is the actual risk dynamics. <\/p>\nThe risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
Either adopt a more granular segmentation\u2014treating established EM, traditional EM, and frontier markets separately\u2014or accept that, for parts of the EM universe, old correlation patterns no longer apply and that \u201creversion-to-the-mean\u201d arguments are misguided in the face of structural changes in risk drivers.<\/p>\nThe risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
The risk premiums on corporate bonds are low and the hoped-for interest rate cuts could fail to materialize! <\/p>\n
We select issuers with robust business models and clear financial fundamentals\u2014whether in Warsaw or Milan is of secondary importance<\/p>\n
We combine risk drivers rather than regions. This creates true stability\u2014not the supposed \u201cbenchmark diversification,\u201d which regularly collapses during periods of stress. <\/p>\n
Through optimized portfolio structures, stable cash flows, and strict control, we deliver the return profiles that are crucial in a fragmented market environment.<\/p>\n
(Wertpapierhandelsgesetz) is provided for information purposes only and should not be construed
as personal investment advice or a recommendation or solicitation to buy, sell or hold
any financial instrument or to adopt any investment strategy. The opinions and statements
contained in this document reflect the current assessment on the date of publication. This information does not constitute a complete analysis of all material facts relating to any country,
region or market. This is not to be considered as financial analysis.
If statements are made about market developments, returns, price gains or other asset
growth as well as risk ratios, these merely constitute forecasts for whose occurrence we assume
no liability. Past performance, simulations or forecasts in particular are not a reliable
indicator of future performance. Assets can go up as well as down. All information has been carefully compiled; partly with recourse to information from third parties.Individual details may prove to be no longer or no longer fully accurate, in particular as a result of the passage of time, changes in the law, current developments on the markets, possibly at short notice, and may change at any time without prior notice. Therefore, no guarantee is given that all the information is correct, complete and up to date.
Please inform yourself independently about all costs relevant to you. Maintaining a custody
account may incur costs; ongoing bank charges may also be incurred. Transaction costs depend
on the asset class: For government bonds and collateralised bonds such as mortgage
bonds, they average around 0.02 percent, for corporate bonds 0.085 percent. For less liquid
bonds, the transaction costs can also be significantly higher than 0.25 per cent. It should also
be noted that transaction costs can temporarily be significantly higher during periods of market
stress. For all products sold by HAGIM, all relevant cost information is made available
prior to purchase.
The information is based on our assessment of the current legal and tax situation. If tax or
legal matters are affected, these should be discussed by the addressee with their tax advisor
or lawyer. Investments in financial instruments are associated with both opportunities and
risks. The handling of conflicts of interest at HAGIM is published online in the legal notice on
https:\/\/www.ha-gim.com\/en\/legal-information. The information contained in this document
is intended for professional clients and eligible counterparties only. This information document
is not directed at US citizens or permanent residents, nor to legal entities domiciled in
the USA, nor may it be distributed in the US. <\/p>\n