Short duration debt, Mideast equity lead first half EM fund performance | Reuters

Short duration debt, Mideast equity lead first half EM fund performance | Reuters:

Middle East equity funds soared in the first half of 2018 after Saudi Arabia got the nod from MSCI for inclusion in its emerging stocks index, while microfinance and short-duration emerging debt funds weathered the bond market shake-out best.

But top-performing emerging market fund managers are cautious about the possible escalation of a trade dispute between the U.S. and China against a backdrop of tightening liquidity.

“There’s a risk that trade tensions go from bad to worse, which could affect global trade, confidence and growth in emerging markets,” said Rob Drijkoningen, co-head of the emerging markets debt team at Neuberger Berman.