Even if you’re on the "staycation" plan this year, your investments can land in exotic places—like Brazil, Indonesia and Mexico—and yield attractive returns in emerging market bonds.
“There is plenty of room for emerging-market debt that is denominated in its own country’s currency,” Zane Brown, a fixed-income strategist and director of Lord Abbett, told CNBC Friday.
Buying in the country’s currency (versus the US dollar) yields double the return in some instances, said Brown. Brown has 20 years of experience in the business.
You can realize an 11.5 percent return by buying in the real (Brazilian currency), as opposed 4.9 percent with the US dollar; using the Indonesian rupiah, that’s an 8 percent return versus 4.5 percent in dollars; buying bonds in the Mexican peso will yield 6.2 percent, rather than 4.1 percent with US money.
The year-to-date returns for 10-year bonds inBrazil, Indonesia and Mexico have been 22.8 percent, 25 percent and 16 percent respectively. During the same time, the S&P 500 has dropped 4 percent.