Invesco poll finds India debt best among EMs
MUMBAI : India is the top choice for debt investments among emerging markets (EMs) for sovereign wealth funds (SWFs) and central banks, a global survey by American fund manager Invesco Ltd has found. The survey, which polled 85 SWFs and 57 central banks managing a combined $21 trillion, found that India beat China in the EM debt sweepstakes. While the share of SWFs that found Chinese debt attractive fell from 71% in 2022 to 51% in 2023, those who found Indian debt attractive rose to 76% in 2023 from 66% in 2022.
Separately, central bankers are increasingly exploring diversification into EM currencies to hedge against volatility, the Invesco Global Sovereign Asset Management Study found. Among 25 central banks that responded, 72% plan to raise exposure to India and South Korea, which polled as the most attractive destinations in emerging markets. “In 2023, sovereign investors find themselves navigating an altered macroeconomic environment, marked by surging inflation and higher real interest rates," Terry Pan, chief executive of Greater China, South East Asia, and Korea at Invesco, said in the study released on Monday.
“We observe an increased affinity for fixed-income assets, including private debt, and heightened interest in EMs, believed to offer potential benefits in a higher-rate environment. Among the EMs, India has piqued sovereign investors’ interest, overtaking China," he added. The report cited several reasons why India “exemplifies the attributes" sought by sovereign investors.
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