Global Retreat From Emerging-Market Bonds May Be a Blessing

Emerging-market bonds are likely to be supported in 2026 as the securities are increasingly owned by local investors who are less exposed to currency risk and are therefore more resilient holders, fund managers say.

Domestic funds have taken on an increasing proportion of local-currency debt in recent years in countries such as China, Mexico and Indonesia as capital markets in those nations have deepened. Local pension funds and insurers in developing nations have also stepped up purchases to meet their growing liabilities.