There is no doubt that 2022 was a bruising year for most asset classes globally, and emerging markets (EM) corporates faced some particularly challenging circumstances. EM was battered by four major events—the invasion of Ukraine by Russia, China's Zero-Covid policies, the widespread financial distress in the Chinese homebuilder sector, and the sharp increase in yields of U.S. Treasuries. However, we see reasons for optimism. The stresses of the year have exposed investment opportunities in EM corporate debt, while also validating strengths of the asset class. In this context, global allocators now believe that EM corporate debt offers compelling value relative to other credit sectors.

z - Cover Image: No Longer Under the Radar: Emerging Markets Corporate Debt Enters the Mainstream

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