Emerging Markets Debt Whitepaper: Understanding the Mosaic of EMD

Emerging Markets Debt (EMD) has delivered mixed returns to investors down the years. Perpetual optimism that developing countries will generate better returns on capital than mature, industrialised nations has not always been borne out by reality. While some EMD issuers have provided excellent risk-adjusted returns, others have been blown off course by reckless fiscal policies. Certain factors have been beyond issuers’ control, notably the enduring strength of the US dollar and the deep damage caused by coping with the COVID pandemic. Nine EM sovereign issuers have been involved in debt restructuring in recent years. On the other hand, EM corporate debt has been the best performing category in public fixed income markets over ten years.

Evaluating this mosaic of opportunities and risks was the task of a cio investment club roundtable in March 2025.