Michele, an executive at Morgan Asset Management, said that the strong rise of emerging market bonds will continue in 2026.

Bob Michele, of Morgan Asset Management, stated that one of the hottest trades in emerging markets this year is still to be one of the best strategies entering 2026, even though the selling pressure on the US dollar may weaken. As the global head of fixed income for the company, Michele expects that local currency bonds in developing countries will continue to rise, with "very high" real yields attracting investors underallocated to this asset class. An index measuring returns on emerging market local government bonds has exceeded 15% this year, making it one of the best performing areas in the global bond market. The weakening dollar, Fed rate cuts, and uncertainty brought by Trump's trade war have driven this increase. All of these factors are pushing investors towards emerging market assets. Michele stated in an interview, "I don't know if we can achieve this year's return levels, but the opportunities in emerging market local bonds are still very large." Michele mentioned that he favors local bonds over hard currency bonds in this area, specifically mentioning bonds from Brazil, South Africa, Mexico, Hungary, Romania, and Indonesia. "These are the types of assets that we will continue to allocate in our portfolio."