Emerging Market Bond Top List and Themes

Latest edition · August 17, 2026

Emerging market bond top list and themes

UBS CIO maintains an Attractive stance on emerging market credit, citing appealing carry well above developed market cash rates. With spreads near historical tights, investors should focus on income carry, quality short- and medium-term tenors, and selective high yield or subordinated debt.

Emerging market hard-currency credit has delivered positive returns year-to-date in 2026, driven by high-yield outperformance, resilient corporate balance sheets, and solid technical demand that absorbed record issuance. While valuations are close to historical tights and macroeconomic uncertainties (Fed path, US inflation, Middle East tensions) linger, UBS CIO keeps an Attractive rating on EM bonds. Investors are advised to adopt a 'carry first, spread compression second' mindset, emphasizing selective short-to-medium maturities, sukuk, EUR-denominated EM bonds, and quality high-yield issuers.

Key takeaways from the latest edition

• 1.UBS maintains an Attractive stance on EM credit, driven predominantly by high interest rate carry relative to cash rates in advanced economies.
• 2.EM fundamentals and technicals remain strong with low leverage, high FX reserves, 0 sovereign defaults in 2025, and record supply smoothly absorbed.
• 3.With spreads trading near historical tights, upside via compression is limited; investors should prioritize carry, quality short-to-medium tenors, and selective high yield/subordinated debt.

What this series covers

• Fed, US inflation, and geopolitics remain key uncertainties
• Fundamentals and technicals remain supportive
• Carry first, spread compression second
• Asia credit remains resilient as higher yields support a balanced risk–return profile
• Changes to our bond selection in Emerging Market Top List and theme
• Restrictions for EEA-domiciled clients
• Opportunities in sukuk
• Opportunities in EUR-denominated bonds
• Opportunities in short- and medium-term bonds
• 12 month rating history
• UBS CIO risk views
• UBS CIO valuation views
• Sell recommendations
• Issuer valuation views
• Required Disclosures
• Producers, disseminators and their competent authorities
• Frequency of updates
• Statement of Risk
• Emerging Market Investments
• Risk Information

Edition archive

• Emerging market bond top list and themes

  August 17, 2026

• Emerging market bonds en 1662592

  July 13, 2026

• Emerging market bonds en 1660889

  June 15, 2026

• Emerging market bonds en 1659451

  May 19, 2026