Structural shifts boost EM debt

As asset allocators assess their underweight allocations, emerging market (EM) local currency debt has come into focus. US fiscal risks and market volatility have led investors to EM debt, which has shown resilience amid the turbulence. EM local currency debt has been out of favour due to underwhelming performances and the US dollar’s rally. However, the latter could be set for a new cycle, and any decline may offer upside for EM local currency. The asset class has benefited from domestic investors’ interest, improved credit quality, and reduced volatility. Learn more about how EM local currency...