asi12:

 

Sooner or later high inflation will lead to high interest rates every where including EM. El-Erain suggests having some EM bonds too. Over the long term this would be  good investment stratagy but would it not hurt bond returns near term if one invest now in bond funds? I am shying away investing in bond funds but on the other hand I am more open to invest in individual bond and to be held until maturity. 

I've been cautious about bond funds for this reason. But in some cases, I think it's worth trusting the manager (at least in go-anywhere funds). For example, a good bond fund manager will stick to short maturities when interest rate increases are likely, to minimize the devaluation, or buy in markets where the interest rate is staying ahead of inflation (if there are any). 

Buying individual bonds and holding to maturity is an option, yes; but if you're thinking long-term, then buying funds and ignoring the short-term price fluctuation is also an option.

--Aalan