Emerging Insights

Asking the right question is half the answer. In a series of three reports, we identify key questions for 2025 and beyond. In our third and last piece we look at how to allocate when top-down regime shifts results in shorter market cycles as we have seen recent years.

At the end of October 2025, Global Evolutions EM IG Corporate debt Composite is leading its peer group over the YTD, 1yr, 2yrs and 3yrs periods, with annualized excess return over the 3yrs period of 226bps gross / 180bps net, demonstrating the opportunities for active managers within this part of the EM fixed-income universe.

A powerful mix of declining trade policy uncertainty, fiscal expansion, monetary policy, as well the AI investment boom creates a fertile ground for EMD returns as we head into 2026.

A short Q4 2025 outlook.

An investment in Emerging Market Debt (EMD) presents an opportunity to diversify and enhance returns in a traditional 60% stocks and 40% bonds portfolio. EMD offers a unique risk profile compared to developed markets, and the asset class is diversified within itself.

Tactical investing can be a double-edged sword.

While it has the potential to generate superior returns compared to buy-and-hold investing, it often proves elusive in major financial markets due to several factors including market unpredictability, behavioral biases, and the complexity of executing tactical strategies effectively. However, there may be opportunities in lesser efficient, more volatile markets as recently noted by Asness (2024), particularly with the advent of noisy social media which can increase volatility – and opportunity.

The U.S. trade strategy toward the BRICS countries has generated significant uncertainty, particularly with respect to India. Despite previously cordial relations with the Trump administration, India has faced elevated tariffs and criticism for its purchases of Russian oil. These actions have fostered distrust and may prompt a reevaluation of India’s geopolitical alignments.

After a strong year in 2024, Emerging Markets sovereign and corporate debt performance continues to stand out. In this note, our Managing Director, Peter Marber, discusses EMD performance on the backdrop of tariffs mayhem and a weakening USD.

In a market environment where uncertainties abound, EMD has shown remarkable resilience year-to-date. In our view, higher uncertainty and strong EMD performance do not contradict each other. The DM-centric nature of the structural drivers behind a more uncertain investment environment implies that EMD has outperformed because of a more uncertain investment environment – not despite of it, forcing many investors to rethink the market narrative.

A short Q3 2025 outlook.

In recent weeks, there has been significant attention focused on the U.S. import tariffs and their impact on growth, inflation, and monetary policy in the world's largest economy. In contrast, much less attention has been given to the consequences these tariffs will have on the world’s second-largest economy, China—both in terms of the U.S. tariffs targeting China and the retaliatory Chinese tariffs imposed on the United States. With this note, we aim to shed light on which of the two countries is more vulnerable in the event of an escalation in the trade war and the imposition of tariffs that verge on the absurd.

In a series of three reports, we identify key questions for 2025 and beyond. In the wake of rising trade tensions, our second piece sheds light on the prospects of EM debt (EMD) in an era of geopolitical uncertainty. Year-to-date, EMD returns have shown resilience, despite rising geopolitical risks. What’s required for this pattern to hold and how should investors position within EMD amid lingering policy uncertainty?

Asking the right question is half the answer. In a series of three reports, we identify key questions for 2025 and beyond. First up: Has US exceptionalism peaked? The consensus still expects it to continue. We have our doubts. The answer will be decisive for both absolute and relative returns in the EM debt universe.

Donald Trump has returned as the President of the United States and has introduced policies that are reshaping international relations and established norms. Among the notable developments, Trump has shown interest in Greenland and the Panama Canal and has even suggested that Canada join the United States as its 51st state.

Emerging Markets sovereign and corporate credit performance stood out in 2024 compared to broader fixed income markets. We give a full analysis of sector and country performance dynamics and why we believe EM credit continues to offer compelling value in 2025.

As we approach 2025, U.S. President-elect Donald Trump appears much better prepared to take office compared to late 2016. The tariff playbook has been revisited, and neighboring countries Canada and Mexico have learned that Trump is willing to use tariffs for purposes beyond just trade practices. China, the main target of U.S. tariffs during Trump’s first presidency, is also better prepared, having begun to leverage its dominance in rare metals. Global leaders are closely watching, staying tuned to social media 24/7. For 2025, we emphasize flexibility and strategies that offer a more idiosyncratic return profile.

The political die has been cast: the Republican sweep in the US means the nation’s political direction will change decisively in 2025.

In this episode of our podcast ‘Emerging Insights’, Alia Yousuf, our Head of EM Corporate Debt, and Edward Soekamto, our Senior Portfolio Manager, talks about the challenges and opportunities in investing in EM Corporate debt.

The main political event of 2024 is fast approaching. We take a closer look at how the US election might impact Emerging Market Debt (EMD) returns.