We had gotten away from posts that included “charts that need no further explanation.”  This chart shows the relative performance of an emerging market bond ETF (PCY) against an emerging market equity ETF (EEM).  After a nearly year long period of outperformance emerging market bonds underperformed last week in a big way.

We have no great explanation for what happened other than the fact that all credit-related assets took a hit last week.  Emerging market bonds did not escape the sell-off.  Forced liquidations, perhaps?  We are not sure, but thought it was worth throwing out there.

We understand that this is not an apples-to-apples comparison.  The emerging market bond and equity indices are comprised with different countries (and weights).  That being said, it is an interesting demonstration of how the past week has reshuffled the asset class deck.

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