LONDON (Reuters) – Emerging market debt playing catch up with U.S. high-yield provides some investment opportunities, analysts at Legal & General Investment Management said on Wednesday, although they also raised concerns over Turkey, South Africa, Brazil and Colombia.

Emerging market hard currency debt had suffered the second worst monthly return over the past two decades in March, said Uday Patnaik, head of emerging market debt at Britain’s biggest asset manager with £1.2 trillion ($1.53 trillion) of assets under management.

Higher-rated emerging markets had enjoyed somewhat of a comeback already, yet more gains were on the horizon, he said.

“The compression between EM and high-yield is clearly now happening over the last few weeks,” Patnaik said during a web conference.

“What is incredibly cheap right now is investment grade Indian quasi-sovereigns and corporates,…there is between 50-200 basis points of tightening still left.”

Chilean investment grade corporates, sovereign debt issued by Abu Dhabi and Qatar as well as the latter’s state-owned lenders were attractive, he said.

Among higher-yielders, LGIM liked Ukraine sovereigns and corporates thanks to the reform story, citing the International Monetary Fund $5 billion lifeline for the country.

“We still like the Pemex compression trade versus the sovereign,” Patnaik added, predicting the spread which had stood at some 700 basis points at some point and had already tightened by about 2 percentage points could come in by around the same amount again.

Meanwhile out of the 20 larger emerging markets, LGIM flagged concerns over Turkey, South Africa, Brazil and Colombia citing external imbalances, dysfunctional politics and excessive debt.

“The debt that is falling due over the next 12 months, plus its current account deficit – that exceeds the reserves that Turkey has, and that is not a situation you want to be in,” said Erik Lueth, LGIM’s global emerging markets economist.

($1 = 0.7831 pounds)