Emerging market assets underperform further

Emerging market assets continued to underperform in March. The "stripped" spread of the JP Morgan EMBI+ Global Index over Treasuries rose to its highest level since late September 2012, while the MSCI Emerging Markets Index of equities dropped by 1% in local currency terms despite further strong gains in the US S&P 500. Investors’ waning appetite for emerging market assets probably stems from at least three factors. First, a mounting concern that the Fed’s quantitative easing is on borrowed time. Second, doubts about the prospects for growth in emerging market economies. And third, fresh worries about the situation in the euro-zone.