EM debt hedge funds play safe amid rally

Emerging-market debt hedge funds, boasting impressive double-digit returns this year, are strategically mitigating risks amidst a deepening rally. Funds are swapping longer-maturity bonds for shorter-dated ones, prioritizing higher-rated, liquid securities, and increasing cash reserves. This cautious approach addresses uncertainties stemming from US policies, global conflicts, and tight pricing, while still seeking selective opportunities for further gains.