According to Jinshi Data, Goldman Sachs Group recommends that emerging market investors prefer bonds denominated in US dollars rather than local currency bonds. Goldman Sachs believes that the volatility that may be brought about by the US election will boost the US dollar and lead to policy changes that may harm assets in developing countries, making US dollar bonds perform better.
Fidelity International takes the opposite view, arguing that local currency assets will outperform as the Fed starts cutting rates. So far this year, emerging market dollar bonds have returned 4%, while local currency bonds have returned 1%.
