EMERGING global bonds should be treated with caution, according to a Guernsey investment manager.

Corazon Capital director Paul Meader (pictured) said developed markets offered little to tempt investors and more exciting opportunities existed in areas such as asset-backed lending.

In the US, Franklin Templeton Fixed Income Group boss Michael Hasenstab insisted global bonds supported portfolio diversification while benefiting from varying economic conditions around the world.

The number of countries opening their capital markets in recent years had significantly broadened the global fixed-income universe, with more than 100 countries with fully or partially functioning bond or currency markets, he said.

‘This larger opportunity set involves not only geographic expansion, but also new instruments that can provide specialised exposures.  Thus, investors are now able to take precise positions in order to benefit from specific developments given the options currently available in emerging-market local-currency debt, corporate debt and derivatives.’