Managers fear the sun may set on emerging market debt

While emerging market debt has enjoyed upgrades of late, managers and recent research point to a tougher time ahead

Fund of hedge fund managers cast doubt over the resilience of emerging market debt after a run saw it appreciate 63% since January 2001.

Investors in JP Morgan's Emerging Market Bond Index at January 2001 - when the Fed began cutting interest rates - gained the healthy return to 31 December, 2004 but Andrew Tolhurst, research director at Sagitta Asset Management, notes more than half the index is now investment grade, and while "this does not mean these markets are risk free," demand has priced