Emerging markets (EM) are facing a complex landscape shaped by rising interest rates, geopolitical tensions, and shifting global supply chains. However, they are becoming increasingly mature and EMs (excluding China) are expected to surpass the combined GDP of the G7 countries for the first time this year. Against this backdrop, corporate bonds from emerging markets could be worth a look, opines Fisch Asset Management.

“With a net leverage ratio of 0.9x for investment-grade issuers and 2.4x for high-yield issuers, the credit ratios remain exceptionally good. This is also reflected in low default rates: they are expected to be 2.7% in 2025 – below the long-term average of 4.4%,” says Thomas Fischli-Rutz, Head of Emerging Markets at Fisch Asset Management.

But not every region and sector is equally interesting, Fischli-Rutz points out. The picture in Latin America is mixed, with Brazil showing some economic momentum, in Central and Eastern Europe, the Middle East and Africa, Turkey and Uzbekistan stand out. In Asia, China’s structural weaknesses pose risks, but India and Indonesia show resilience.

Read the full insight here.