EM Debt Could Be 2026 Fixed Income Star

Core Insights - Emerging markets debt, particularly the Neuberger Berman Emerging Markets Debt Hard Currency ETF (NEMD), is expected to perform well in 2026 following a strong showing in 2025, where it increased by 16.36% year-to-date as of December 8, 2025 [2][3] Group 1: Performance Drivers - The impressive performance of NEMD in 2025 was attributed to strong fundamentals across emerging markets, credible central bank policies, and resilient growth despite geopolitical volatility and macroeconomic challenges [4][6] - The ETF's portfolio includes significant allocations to bonds from commodities-exporting countries, which are currently favored by investors [6][7] Group 2: Future Outlook - The economic and financial fundamentals in emerging markets are broadly sound, with expectations of supportive monetary easing policies and a stable dollar, which could enhance performance in 2026 [7] - There is an anticipation of continued regionalization supporting emerging market economies, alongside favorable commodity prices benefiting exporters [7]