02.19.2025
No Longer Stuck in the Middle?
By now, readers likely know that large-cap equities propelled the U.S. equity market higher in 2023 and 2024, as the…
Local currency emerging markets debt has been one of the standout fixed income asset classes this year. The J.P. Morgan GBI-EM Global Diversified Index — which tracks local currency bonds issued by emerging market governments — is up nearly 5% year-to-date.¹ This compares with the Bloomberg US Agg up 2.5% over the same period. Yields for the emerging markets index peaked in the fourth quarter of 2022 and remain near multi-year highs. Local currency EM debt could stand to benefit for three reasons: higher starting yields, proactive emerging markets central banks, and emerging versus developed GDP growth differentials.
In sum, a number of tailwinds could continue to position EM local currency debt for strong relative returns as the year progresses.
Print PDF > More Bang for Your… EM Local Currency?
¹Through June 26, 2023
The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.
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