A strong dollar under US president-elect Donald Trump could wreck returns in emerging market bonds, say investors, driving further outflows from a sector already hit by a lengthy period of high interest rates in developed economies.

Investors have pulled nearly $5bn overall from funds investing in dollar and local currency denominated emerging market bonds this month as of mid-November, taking this year’s total net outflows to more than $20bn, according to data from JPMorgan. That comes after withdrawals of $31bn last year and $90bn in 2022.

Global markets have been dominated by so-called “Trump trades” in recent weeks, as expectations that his policies of tax cuts and tariffs will fuel inflation, pushing the dollar and Treasury yields higher.