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Yield hungry? Emerging market bonds look tasty, but wait

In the ongoing search for yield, you might have noticed that emerging market debt has begun to look intriguing as bond prices tumble and local currencies weaken. The word from UBS: Don’t be fooled, emerging market debt has further to fall.

Last year was a bad one for investors in this area of the market, and the slump has stretched into 2014 as well. According to Bhanu Baweja, a UBS strategist, the average yield for 10-year bonds has risen to about 7 per cent from below 6 per cent at the start of 2013 (as yields rise, bond prices fall).