THE BIG READ: Dictators can be a good investment — if you can bear it
Autocrats have beaten democrats in bond markets
Dictatorships are on a hot streak in the bond market. In the past year, sovereign notes from emerging markets under autocratic rule have returned 15% on average, compared with just 8.6% for securities from developing countries considered democratic, according to data compiled by Bloomberg. They also have better returns over the past two years, though beyond that the advantage fades. For all the ugliness that often comes with authoritarian governments - the human rights abuses, the curbs on free expression - they often can be very rewarding for bondholders willing to turn a blind eye to those things in exchange for the stability that they can foster. This isn't necessarily a brand-new phenomenon, of course, but a pair of recent events served as a reminder of the outsize gains and losses it can trigger. On April 12, Venezuela's creditors reaped large returns when President Nicolas Maduro made good on $2.5-billion (R32.8-billion) in debt payments even as he struggles to come up with en...
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