Global investors managing more than $500 billion are buying emerging-market debt and shares of well-capitalized companies to avoid the European debt crisis and low-yielding havens such as U.S. Treasurys.
"Balance sheet strength is a big theme for us at the moment," said Anne Richards, chief investment officer at Aberdeen Asset Management Plc, which oversees $288 billion. "Many European equities are high risk while we are also nervous about U.S. Treasurys, which look overvalued."
Surging borrowing costs for Italy and Spain, Europe’s third- and fourth-biggest economies, have pushed up prices of traditional haven assets such as 10-year Treasurys and German bunds, which are offering negative real yields.
That’s leading investors who met last week at the annual Fund Forum conference in Monaco to look to emerging markets for capital preservation as well as growth.