The most widely followed emerging market local currency benchmark, the JP Morgan GBI-EM Global Diversified Index (the "Index") returned 3.55% for the 3rd quarter of 2017 bringing the year-to-date return to 14.28%. The yield on the Index fell 16 basis points (bps) to 5.99% at the end of the quarter while the yield on 5-year maturity U.S. Treasury bonds rose 5bps to 1.94%.
Of the Index's 14.18% year to date return, more than half or 8.02% has come from the domestic Treasury bonds, comprising yield earned as well as the decline in the bond yield of the Index. The remainder of the Index's return came from strengthening emerging market currencies versus the U.S. Dollar (USD) over the period. Broadly though, both domestic bonds as well as emerging market currencies have enjoyed positive momentum since the start of the year.
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