Emerging Market Debt Resilience in a More Volatile World

Emerging market debt has proven resilient in early 2026 despite an oil shock, supported by high real rates and improved policy frameworks. Carmignac maintains a constructive view, favoring high-yield sovereign credit and LatAm FX while remaining cautious on local rates.

Key Takeaways

• 1.Emerging markets showed significant resilience to the March 2026 oil shock due to high real rates and strong external balances.
• 2.EM central banks have maintained policy credibility and rebuilt reserve buffers, reducing the need for aggressive tightening cycles.
• 3.The strategy favors high-yield sovereign credit and selected EM currencies (LatAm) over local rates, which face inflation pressure from oil.

Table of Contents

• FROM DISINFLATION TO CENTRAL BANK REACTION
• BEYOND THE SHOCK: WHY THE CYCLE REMAINS INTACT
• SELECTIVE RISK-TAKING IN A MORE COMPLEX ENVIRONMENT
• SOVEREIGN CREDIT: FAVOURING CARRY, REFORM AND ASYMMETRY
• FX: WHERE CARRY, VALUATION AND EXTERNAL ADJUSTMENT MEET
• LOCAL RATES: CAUTION AMID UNCERTAINTY
• RISK MANAGEMENT: PRESERVING CONVEXITY
• CARMIGNAC PORTFOLIO EM DEBT FW EUR ACC
• MAIN RISKS OF THE FUND
• FEES
• PERFORMANCE (ISIN: LU1623763734)

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