Several Morgan Stanley analysts, led by Andrew Sheets, said it's time for investors to take more calculated risks and take a look at emerging markets.
"'Value' assets are challenged by our forecasts for growth, oil, rates and currencies. ‘Defensive’ assets are already rich. We think this backdrop favors 'quality carry' – assets that can beat inflation, with some protection against weaker growth. Securitized products and emerging market local rates fit this bill."
The analysts added that securitised debt has lagged behind a rally in the US and Europe with room to help structured assets outperform further down the field.
The analysts also highlighted their optimism for emerging market bonds as they are poised to continue their recent positive performance.
Read more at Bloomberg.