The fourth quarter of 2025 saw significant positive trends in the portfolio, notably outperforming the ICE BofA 3-Month US Treasury Bill Index. This robust performance is consistent with its year-to-date trajectory and overall achievement since its inception, highlighting a sustained period of growth and stability.
Across all segments, emerging markets debt demonstrated impressive gains, extending a year-long upward trend. This strong showing was bolstered by a conducive global macroeconomic environment and a cautious approach by the Federal Reserve, which together created favorable conditions for the asset class. The heightened demand for emerging market debt stimulated strong corporate and sovereign issuance during the quarter, contributing to a total issuance of approximately $705.9 billion for 2025, marking a substantial 29% increase from the previous year.
The consistent outperformance and significant growth in issuance reflect the increasing maturity and attractiveness of emerging markets as a viable investment avenue. This positive momentum indicates a healthy and expanding sector, providing ample opportunities for investors seeking diversification and growth.
The strong performance of emerging market debt underscores the dynamic nature of global finance, illustrating how strategic investments in diverse economies can lead to substantial returns. This success highlights the importance of adaptability and foresight in navigating the complexities of international markets, ultimately fostering economic development and prosperity worldwide.