Emerging markets enjoyed a positive second quarter to end the first half of 2016, despite the ongoing uncertainty plaguing developed market economies. For developed markets, negative interest rates, lethargic economic growth and geo-political concerns like "Brexit" dominated the agenda.
By contrast, emerging markets have rebounded strongly from the volatility we saw in the first quarter of 2016. As an indication, the most widely followed benchmark, the JP Morgan GBI-EM Global Diversified Index returned 2.71% for the second quarter and 14.02% year-to-date. The yield on the benchmark index declined 19 basis points (bps) to 6.33% at the end of the quarter. Over the same period, the yield on 5-yr maturity U.S. Treasury bonds declined 21 basis points to 1.0%.
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