“EDD” or “ADD”? Look at the emerging markets bond fund ETFs. Do investors suddenly believe that the best trade of the last few years is entering a crisis stage?
The move of the last 4 weeks tells you massive fund flows are at work and allocations are changing.
With a -16% since May 8th correlated with the identified bloodbath in emerging market currencies, and commodities. The Morgan Stanley Emerging Markets Domestic Fund (EDD, quote) ETF is focused on the local currency debt of emerging market sovereigns and some corporates.
Places like Turkey, Mexico, Poland are well represented here. Do investors have “ADD” and thus are forgetting that fundamentals here are superior to G3?
Setting up for a major opportunity.
