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From Komfie Manalo, Opalesqe Asia:

Western Asset Management, the $446.7bn fixed income manager subsidiary of Legg Mason, a diversified group of global asset management firms, said in its latest report that emerging market high-yield debt offers one of the most exciting opportunities in the emerging market asset class. But investors should know where to look to find specific countries that offer opportunity.

The report, written by Robert Abad and Matthew Graves, members of Western’s emerging markets team, found that during the near-unprecedented market volatility in 2011, the assets under management in emerging markets rose a sharp 41% compared to the JP Morgan series of emerging market debt indices.

"The transformation in the sovereign credit quality of much of the emerging world left it well positioned to deal with the aftermath of the crisis, and its performance since 2008 represents a structural break with a volatile past," says Graves. "However, the expansion in the asset class has occurred precisely as the traditional driver of returns - sovereign spread compression - has largely run its course. As a result, market participants have looked to EM local currency and corporate credit markets of the much broader EM universe to find additional sources of yield and total return, helping to facilitate the rapid development of these segments......................

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