BlackRock, the world's largest asset manager, is maintaining a bullish outlook on emerging market bonds for 2026, despite performance so far falling short of initial expectations. At the start of the year, BlackRock predicted that annual total returns on emerging market hard-currency bonds would be in the "mid-to-high single digits," and local-currency bonds would be in the "high single digits to low double digits," but these have not materialized so far. Michelle Obenas, head of emerging market debt at BlackRock, said that while the market remains skeptical and nervous about the Fed's outlook, once the path of Fed monetary policy becomes clearer, demand for high-yield assets should recover, and emerging market bonds should regain their upward trend. According to JPMorgan indices, returns on emerging market local-currency bonds so far this year are 3.5%, and hard-currency bonds are 2.3%. Obenas noted that emerging market economic fundamentals are sound and investment inflows continue, and she is particularly bullish on local-currency bonds, stating that "by year-end, total returns should catch up in line with the originally assumed scenario."
BlackRock IncBlackRock's bullish stance on EM bonds is a positive outlook for its fixed income business, though not a direct financial event.
