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The Barclays emerging-markets bond index -- made up largely of government-issued debt -- has returned roughly 70 percent since the market meltdown three years ago. That's nearly three times as much as the comparative Barclays U.S. bond fund. The reasons for such a wide divergence are rooted in economics: The BRIC countries ran 2011 budget deficits of about 2.5 percent of GDP, while the U.S. ran a deficit of 8 percent. Bloomberg consensus forecasts show emerging markets growing at double or triple the rate of developed markets over the next couple of years, which will only benefit them more.

The Barclays emerging-markets bond index -- made up largely of government-issued debt -- has returned roughly 70 percent since the market meltdown three years ago. That's nearly three times as much as the comparative Barclays U.S. bond fund. The reasons for such a wide divergence are rooted in economics: The BRIC countries ran 2011 budget deficits of about 2.5 percent of GDP, while the U.S. ran a deficit of 8 percent. Bloomberg consensus forecasts show emerging markets growing at double or triple the rate of developed markets over the next couple of years, which will only benefit them more.
June 01, 2012
Article
How Much Emerging-Market Bonds Have Outpaced U.S. Bonds Since March 2009: 3X
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