Government bond yields in emerging market countries like India and Mexico will receive a bump from a sustained low oil price environment, a fixed income portfolio manager said Monday.
"The yields in many emerging market countries are trading at wide levels relative to [investment grade] corporate bonds here in the United States, in some cases the widest since the financial crisis. So, while there are challenges, we think there's also an opportunity there," John Bellows, portfolio manager and research analyst at Western Asset Management, told CNBC's "Power Lunch."
Global benchmark Brent crude has rallied slightly into February but plunged about 46 percent in the last year. The drop in oil prices has driven down inflation, which could prompt many central banks to ease up on monetary policy, Bellows said.
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Cutting rates, in turn, bodes well for bondholders, he said.
"India would be an example there. That's a place where they've cut rates recently, providing a boost to bonds but also a boost to risk assets," Bellows said.
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He added that Mexico has been "unfairly grouped" with debt-strapped nations heavily dependent on oil production like Venezuela.
"We like the story, and we think maybe the oil trade has been overdone in Mexico," Bellows said.