Why are investors turning to emerging market short bonds?

Earlier this year, US President Donald Trump’s ‘Liberation Day’ tariffs shocked companies, investors and markets. However, emerging market (EM) assets are in a strong position to navigate such events, particularly hard currency bonds issued in US dollars. Such assets remain strong because many of the larger EM debt issuers in Latin America and the Middle East have seen a limited impact so far. The highest tariff risks are likely to target smaller, open Asian economies, which have less exposure to EM debt indices. EM assets have remained resilient despite market challenges, with hard currency...