Mohamed El-Erian, the world’s biggest emerging-market bond fund manager, considers the largest decline in developing country debt in 10 months a buying opportunity.

As developing-nation bonds declined last week, El-Erian was adding Brazilian and Russian securities to the $20 billion in debt he manages at Pacific Investment Management Co. in Newport Beach, California. His bet is that the tumble in prices will be short-lived as investors focus on underlying strengths, according to Bloomberg.

``We have been increasing our emerging-market risk,’’ he said in a March 18 interview with Bloomberg. ``People forget that there is a reason why you get paid these spreads, and that’s because you must be willing to underwrite some volatility.’’

He points to the strength of Brazil, where the economy is growing at its fastest clip in a decade, and Mexico, which is expanding at the quickest pace since 2000. Emerging market ``economic and credit fundamentals have improved significantly in recent years,’’ Fitch Ratings said last month.

Emerging-market bonds yesterday extended last week’s decline as many investors avoided riskier assets that were among the best performers in 2004. Oil prices that remained near record levels and the decision of the Federal Reserve policy makers to move higher U.S. interest rates helped reduce prices.