Emerging market fixed income is heading into the new year with strong momentum. With solid YTD performance and favourable macro trends, Mohammed Elmi, Senior Portfolio Manager explains why the team continue to feel optimistic for the asset class in 2026.
Fixed income markets should benefit from continued central bank easing in 2026. We expect lower interest rates in the US as policymakers respond to weaker labour market trends, and lower rates in Europe because of further declines in inflation.
Despite no shortage of challenges and obstacles, returns across fixed income asset classes have been largely positive in 2025, with income levels a major contributing factor.