Allocation to EM debt rises above long-term average for first time in three years: In another new milestone for emerging markets, the proportion of EM bonds in global fixed income portfolios has risen above the long-term average for the first time since 2014, writes Steve Johnson for the Financial Times. Global bond funds’ allocation to emerging markets reached 11.5% this year, inching above the long term average of 11.1% and closing in on the 13.5% peak in 2013, according to data from EPFR Global, the Institute of International Finance and Morgan Stanley. “As a percentage of global fixed income allocations, EM has only this year returned to its 10-year average of around 11%,” said Gordian Kemen, global head of emerging market fixed income strategy at Morgan Stanley. This follows the taper tantrum of 2013 and the commodity super-cycle in 2014-15. The buying spree has been focused on hard currency EM debt, with Argentina now vying with Brazil as the country where foreign investors are most overweight, followed by Egypt.