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Market gauges of inflation-adjusted borrowing costs have shot to their highest in more than a decade across major economies as AI companies and governments ramp up bond sales, raising risks for stock markets and the world economy.
South Korea and Taiwan are grabbing the majority of financial news headlines when it comes to international exposure, but a peek inside Latin America reveals potential opportunities. Brazil, in particular, could be offering investors ample value in both equities and bonds beyond those aforementioned countries already benefiting from the artificial intelligence (AI) buildout.
iShares J.P. Morgan USD Emerging Markets Bond ETF is rated HOLD as recent recovery limits further significant upside. EMB's future returns are expected to be driven primarily by its 5.1% yield, not further price appreciation or spread compression. Diversification and sovereign focus make EMB attractive for income, but risk-reward is now balanced after strong gains.
Investors are returning to the bond market in force, driving fixed-income ETFs toward another record year as higher yields make bonds attractive for income-seeking investors once again.
Roughly six months ago, our December 2025 piece flagged Vanguard Emerging Markets Government Bond Index Fund ETF Shares (NASDAQ: VWOB) as an overlooked monthly-income play for retirees, highlighting a roughly 5.7% yield, monthly distributions near $0.32 per share, and a surprise 13.5% capital gain in 2025.
The iShares J.P. Morgan USD Emerging Markets Bond ETF (NASDAQ:EMB | EMB Price Prediction) is the default vehicle for retirees and income investors seeking higher coupons than U.S.
Fixed income continues to sell off across Europe which focuses investors' minds on UK April inflation. Crude prices slip on news that several tankers were able to exit the Strait of Hormuz.
Japanese investors became net sellers of foreign stocks in April for the first time in four months, as concerns over rising energy costs linked to the Iran war and broader inflation risks weighed on sentiment toward overseas equities. Data released by Japan's Ministry of Finance on Wednesday showed that investors sold a net 636.4 billion yen ($4.04 billion) worth of foreign stocks during the month.