EM local-currency bonds offer high real yields, strong 2025 returns, and resilience to shocks, driven by credible policy and solid fundamentals.

EM high yield has extended its 2025 momentum, delivering strong carry and compelling yields. With higher credit quality and lower defaults, the segment offers a more attractive risk profile than US high yield.

U.S. stocks were broadly steady, but policy uncertainty and a pullback in high-valuation tech and AI names created a choppier market that weighed on many sentiment-driven and innovation-focused companies.

A rare pocket of high monthly income has emerged in ex-financial preferreds, creating an opening for investors looking to boost yield.