Emerging Market Bonds

UBS maintains an 'Attractive' view on Emerging Market (EM) bonds, citing resilient fundamentals and elevated yields that are expected to deliver high-single-digit returns despite geopolitical volatility.

Key Takeaways

• 1.UBS rates emerging market (EM) debt as 'Attractive', expecting continued outperformance versus cash and high-single-digit returns.
• 2.EM fundamentals are currently stronger than in previous cycles, supported by higher foreign-exchange reserves, improved current accounts, and lower fiscal deficits.
• 3.Geopolitical stress has been weathered effectively, with spreads on sovereign and corporate EM debt retracing to below pre-conflict levels.

Table of Contents

• Emerging market bonds
• Central scenario
• Upside scenario
• Downside scenario
• Global asset class preferences definitions
• Appendix
• Risk information

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