Our Emerging Markets Debt team provides comprehensive coverage across both Emerging Markets (EM) hard and local currency markets, with expertise in managing both dedicated strategies and multi-asset solutions across EM credit, rates, and foreign exchange – providing clients with a fully integrated and versatile investment platform. Our strategies are anchored by our macroeconomic framework, leveraging our global EM platform to inform an interconnected global perspective.
The team manages over USD 6 billion across its platform, offering a diverse range of products, including EM local, hard, and blended currency strategies.
We have been managing emerging market debt portfolios for more than 25 years.
We cover more than 90 countries and integrate ESG into the investment processes of each of our strategies.
Emerging market debt is the fixed income debt that is issued by countries with developing economies as well as by corporations within those nations. It includes local and hard currency. Since countries can be at different stages in the economic cycle, interest rates and returns can be uncorrelated to those in developed markets. The embedded optionality in EM fixed income allows investors to benefit from evolving market conditions while having multiple levers that can provide both downside risk mitigation and meaningful alpha generation potential.
Our team’s structure fosters a comprehensive perspective by enhancing collaboration and connectivity across multiple teams within Invesco Fixed Income (IFI), integrating global insights with local expertise to provide a full coverage platform. Our approach blends macro- and country-analyses across developed and emerging markets, seeking to mitigate downside risk while optimizing returns in an evolving market landscape. By investing in emerging market debt our clients can benefit from diversification in their fixed income strategy and yield enhancement.
We believe that the integration of ESG into sovereign investing needs to incorporate an assessment of a government’s policy intentions. We make efforts to integrate ESG factors at all steps of the investment process and portfolio construction. We believe countries with good government quality and a strong pro-investment policy mindset are inherently beneficial to long-term sustainability. This has an enduring positive environmental and social impact on the wellbeing of these country’s citizens.
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Emerging market debt is the fixed income debt that is issued by countries with developing economies as well as by corporations within those nations. It includes local and hard currency.
Global fixed income markets have delivered good performance in 2025. Emerging market (EM) debt—both local and hard currency—has demonstrated resilience throughout the global monetary policy cycle, despite elevated geopolitical uncertainty. Looking ahead, we remain constructive on EM assets, supported by generally attractive valuations and compelling alpha opportunities across EM interest rates and foreign currency.
Local currency bonds are debt securities issued by sovereigns or corporates in their local currency. The return drivers come from local yields, capital appreciation (changes in yield curve or credit standing) and FX. Since countries can be at different stages in the economic cycle, interest rates and returns can be uncorrelated to those in developed markets. Given continued growth, local currency bonds tend to be more liquid than hard currency bonds and the list of markets with investible/liquid local bond markets that are accessible to foreign investors, continues to increase.
Hard currency bonds are debt securities issued by sovereigns or corporates in other currencies – usually in a developed market currency, such as the USD or euro. Many low income, weaker developing countries, “frontier markets” are incented to issue in hard currency to attract foreign investment (perceived as less risky if issued as a USD or euro asset) versus issuing in their local currency.
You can invest in emerging market debt by either investing in actively managed mutual funds or exchange traded funds (ETFs). Invesco offers a broad range of actively managed funds and ETFs.
The integration of ESG into investment practice is rapidly evolving for fixed income investors. There is growing regulatory interest and market demand for sustainable investments. In addition to a growing preference for some investors.
The return drivers come from local yields, capital appreciation (changes in yield curve or credit standing) and forex (FX).
