Emerging markets debt has evolved into a vast and increasingly diverse asset class, spanning sovereign and corporate bonds across both hard and local currencies. As its size has grown, so too have the opportunities which requires focused and careful credit analysis. Here we explore what defines the asset class and examine the role emerging markets debt can play in portfolios.
In a world where fixed income investors are seeking yield, diversification, and growth, emerging markets debt hard currency offers a compelling opportunity. Spanning 70-80 countries at different stages of economic development, the asset class provides access to a wide range of economic drivers and return sources.
Today, the total emerging markets debt universe represents more than US$32 trillion1, making it a significant component of global fixed income markets.
We explore how emerging markets debt hard currency differs from local currency debt, the benefits of investing in the asset class and why active country and security selection can be critical to generating alpha.
1 Source: JP Morgan, total debt stock, 31 December 2025.
