Bond investors say emerging markets will suffer most in US, China trade war

Bond investors are betting that emerging-market assets will be the worst hit if global trade tensions continue to simmer.

Ambushed by the latest tweet storm from US President Donald Trump and his carry through with higher tariffs, they are selling higher-yielding developing-market assets while scaling into government debt in advanced economies. Or they are just sitting it out, waiting for the latest spike in volatility to settle down.

Vanguard Asset Management expects riskier debt — such as that of Ukraine, Argentina and Indonesia — to be hardest hit by the turbulence. Deutsche Bank AG prefers to take a short position