Rate hike ‘may not hit emerging markets’

Not all bond investors are ready to rush out of emerging markets once the US Federal Reserve starts raising interest rates. Goldman Sachs Group, for one, is staying put.

While US policy-makers placed a possible December rate lift-off back on the agenda last week, the New York-based bank envisages no erosion in the appeal of investing in higher-yielding assets such as developing-nation euro bonds.

The reason: Fed rates will not rise fast enough to diminish the allure of emerging-market debt that offers almost 400 basis points more than US Treasuries.