Meaningful Distinctions: Emerging Market Corporate Bonds Versus Emerging Market Sovereigns

Emerging market (EM) credit, a general catch-all phrase, merges together two distinct investment opportunity sets, EM sovereigns and EM corporates.

Lately, emerging market corporates have attracted growing investor interest by offering enhanced diversification potential, an up-in-quality opportunity set, spread premiums, and strong absolute and risk-adjusted long-term returns relative to the EM sovereign universe.