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Bond Portfolio Allocations in South Africa Emerging Markets

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  • Jinghua Wang
  • John Bilson

Abstract

Over the past fifty years, economic growth in emerging markets has been supported by investments in capital and technology from the developed world. The benefit of this development for the emerging markets, as measured by growth in income, employment, and wealth, is immediately apparent. There have also been significant advantages for the developed world through opportunities for higher risk adjusted returns from investments in emerging markets. This study explores the benefits of the diversification of global government bond portfolio, and provides complete performance evaluations of DMs with or without South Africa emerging market (SAEM) bonds. The study examines the benefits of inclusion of SAEM bonds in DMs, the degrees of financial integration among the research markets, the relative bond returns of dynamic factor models with time-varying coefficients and the robust tests of bond portfolio performance between DMs with SAEM and bond index. The results of this study provide important implications for global investors by identifying diversification gains in SAEM.

Suggested Citation

  • Jinghua Wang & John Bilson, 2016. "Bond Portfolio Allocations in South Africa Emerging Markets," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 5(1), pages 73-80, January.
    • Handle: RePEc:rbs:ijfbss:v:5:y:2016:i:1:id:362
    DOI: 10.20525/ijfbs.v5i1.343
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    References listed on IDEAS

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