Elbie Louw

Over the 12 months to February 2026, the US dollar weakened by 12.6 percent against the euro, a move mirrored across several emerging-markets currencies, including the Brazilian real, South African rand, Mexican peso and Malaysian ringgit. This currency shift has pushed managers in the Morningstar Global Bond – Diversified category toward local-currency emerging-markets debt to capture both rate differentials and currency appreciation.

Local currency government bonds in Latin America and South Africa had a strong year in 2025, while major Asian countries lagged the broader market.

Global flexible bond strategies cover a wide range of different approaches. Investors should tread them with caution.

Top rated firms come in all shapes and sizes. Colchester Global Investors and MFS Asset Management have different specialties and histories. Both stand out for their commitment to putting investors’ interests first. This earns them both a Morningstar Parent Pillar rating of High.

Emerging-markets hard currency bonds have delivered positive returns for USD investors in every quarter of 2025. However, European-based investors faced negative returns in the first half of the year due to a stronger euro.

Amundi and BNP Paribas pursue scale and expertise through mergers, but integration challenges create uncertainty over long-term benefits for investors.

It has been an eventful year so far for emerging market debt. Investors have enjoyed strong returns in US dollars, with the JPM GBI-EM Global Diversified index gaining 11.4 percent through July. India’s weighting in the benchmark has increased, but not all fund managers are equally enthusiastic about the country’s prospects.

Local emerging-markets debt strategies took a beating in the last quarter of 2024 but recovered spectacularly in dollar terms in the first half of 2025 with the widely-used JPM GBI-EM Global Diversified index recording a return of 13 percent for the six-month period.

Morningstar this week compares Comgest to Carmignac as it highlights why strong culture, stability, and long-term focus define top-tier asset managers.

Emerging-market corporate bonds slumped in early 2025, yet analyst-rated strategies from Loomis Sayles and Ninety One stand out for experienced teams, disciplined risk-taking, and distinct approaches amid rising global uncertainty.