The Quiet Outperformer: Why EM Bonds Deserve a Second Look

O argumento fundamental para investir em títulos de mercados emergentes (ME) vem sendo construído há algum tempo, mas os investidores têm demonstrado pouco interesse nessa classe de ativos nos últimos anos. No entanto, acreditamos que isso está mudando. O drama tarifário em curso serviu como catalisador, mas os impulsionadores de longo prazo dessa alteração não são novos e acreditamos que devem continuar. Os retornos recentes e de longo prazo refletem isso. Os títulos de mercados emergentes tiveram um desempenho significativamente superior ao dos títulos agregados globais e dos EUA neste ano, além de também superarem os títulos de grau de investimento e de alto rendimento dos EUA. No longo prazo, os títulos de mercados emergentes têm superado discretamente o desempenho dos mercados amplos globais e dos EUA na última década e, em especial, desde 2022.

Os títulos de ME tiveram desempenho superior ao dos mercados globais e dos EUA na última década

Source: Morningstar as of 5/31/2025. EM Bonds is represented by the 50% J.P. Morgan EMBI Global Diversified Index/50% J.P. Morgan GBI-EM Global Diversified Index; Global Broad Market is represented by the ICE BofA Global Broad Market Index; U.S. Broad Market is represented by the ICE BofA US Broad Market Index. Past performance is no guarantee of future results. Index performance is not representative of fund performance. It is not possible to invest directly in an index.

Performance Is Speaking Loudly

A key driver in this outperformance is the higher yield. As of May 31, 2025 EM bonds yielded 7.5%, a 2.8% increase over the broad U.S. bond market and more than 3% above the 10-year U.S. Treasury bond yield. In addition to these high nominal yields, real yields in emerging markets have been significantly higher than those in developed markets, favoring the case for local currency bonds in particular. Central banks have demonstrated a strong focus on keeping inflation under control, by hiking rates far before most developed markets and keeping real rates high. High real rates support emerging markets foreign exchange (EMFX) rates, providing central banks flexibility to ease rates if needed to support economic growth. Further, fundamental metrics, such as debt-to-GDP ratios, fiscal deficits, and current account balances compare favorably to developed markets.

Developed Markets: Growing Risk, Diminishing Reward

In addition to the long-term fundamental strength we see in emerging markets, we also see increasing risk in developed markets. Ongoing political dysfunction and the inability to address increasing debt levels means that investors may not be adequately compensated for the risk they are taking. These dynamics, as well as continued inflationary pressures, put pressure on developed markets rates, which could drive underperformance. The dollar’s ongoing role globally has started to be questioned, and recent behavior of U.S. rates and the U.S. dollar has not followed historical patterns. Heightened geopolitical risk may keep commodity prices high, stoking inflation and pushing yields higher in the U.S. while putting further pressure on the U.S. dollar – while benefiting emerging markets.

Why Now? Diversification and Dollar Dynamics

Altogether, we see a strong case for diversifying a U.S.-centric fixed income portfolio towards emerging markets bonds, given low to moderate correlation with other fixed income asset classes and strong negative correlation to the U.S. dollar (particularly local currency denominated bonds). Many investors are underinvested in EM bonds, and we believe now is the time to consider higher exposure to the asset class. With risks growing in developed markets, stronger fundamentals in EM and more attractive EM bond yields we believe outperformance can continue.

VanEck Solutions

VanEck offers active and passive investment solutions for investors to access the benefits of emerging markets bonds in their income portfolios:

The VanEck J.P. Morgan EM Local Currency Bond ETF provides exposure to local currency bonds issued by emerging market sovereign issuers. It seeks to track the J.P. Morgan GBI-EM Global Core Index, part of the most widely followed local currency benchmarks globally due to the design around liquidity and investability.

For investors seeking the higher yields available through EM corporate bonds, the VanEck Emerging Markets High Yield Bond ETF provides exposure to non-sovereign EM issuers rated below investment grade.