News Overview

EM Corporate Bond Newsletter

January 2026

Monthly report of the fund management

The year ended on a relatively calm note, with fairly stable market performance in December. US interest rates remained virtually unchanged and risk premiums stayed stable, resulting in a slightly positive performance of 25 basis points. Overall, the performance of emerging market corporate bonds for the year was just over 6% (based on USD). 

Note: Past performance is not a reliable indicator of future performance.

 

Macro Overview

Commodity markets closed December on a slightly positive note, but the start of the year brought momentum enthusiasts back to the market and metals got off to a positive start to the new year. 

On the macro side, the US figures, which were reported late in part due to the government shutdown, did not provide any new impetus. The Fed lowered key interest rates again to 3.75%, citing the weakening labour market, as the unemployment rate had recently shown a slight upward trend and stood at 4.6%. Leading indicators for manufacturing and industry again delivered weak figures at the beginning of January. Only 11% of industrial companies recorded growth. By way of comparison, this figure was 22% in November, 33% in October and 39% in December 2024. This figure was also the lowest since the Lehman crisis in April 2009. By contrast, figures for the service sector remained robust.  

Emerging Markets Overview

The Asian purchasing managers' indices climbed slightly above 50 in December, indicating slight growth. However, the "new orders" component remained weak. The exception here is South Korea, where the AI boom is providing a boost.  

Mexico wants to impose tariffs of up to 50% on Chinese and Asian goods – a clear signal that the country wants to protect its own industries and follow US policy towards China. China promptly protested this announcement. In my view, Latin America is increasingly becoming a "battlefield" between the US and China. After the US recently "dusted off" aspects of the Monroe Doctrine, China issued a strategy paper on the importance of Latin America and the Caribbean for the country. This is also reflected in enormous investments in war machines. 

See also some news links:

The new year has already seen the first clear steps by the US in this geopolitical chess game in Venezuela. We will continue to follow the news on this in future issues. 

At a fundamental level, there was positive news for Argentina, Ivory Coast and others, with an improvement in the credit ratings of various rating agencies. Paraguay was even upgraded from high yield to investment grade.  

Colombia is continuing its very expansionary fiscal policy, now also with an increase in the minimum wage, as President Pedro wants to be re-elected in 2026. The opposition can certainly count on the help of the US which is not surprising. 

Overview of EM Companies

The news situation at company level was manageable in December. The only noteworthy developments were the positive rating changes for LATAM Airlines (S&P upgraded the oultook to positive on the BBB- rating) and the negative rating changes for Raizen and AGRO.

Note: The companies listed here have been selected as examples and do not constitute investment recommendations.

Outlook & Performance

Performance was 5-10 basis points above the market, partly due to the positioning in airline bonds mentioned in November. The improved growth prospects for emerging markets, also in comparison to industrialized nations (see chart), and the lower debt levels of EM countries and companies will ensure inflows of funds at historically very low risk premiums in the coming months.

Note: Please note that investing in securities involves risks as well as opportunities.

Chart 1: Overview of the fastest-growing economies 1947–2025.
Source:  IMF, World Economic Outlook reports, World Bank, Maddison Project historical GDP data 

Performance opportunities for the funds:

  • The current prevailing narrative that "emerging markets are better than industrialised countries" is driving further inflows into the asset class 

  • Trends in individual sectors continue to offer investment opportunities 

Performance risks for the funds:

  • Geopolitical risks are increasing, but the market has so far reacted calmly to the war of words

  • Interest rate developments in the US remain uncertain; higher metal prices could push inflation up again 

Overview Performance

ERSTE BOND EM CORPORATE

Note: Performance chart since fund launch. Past performance does not allow any reliable conclusions to be drawn about the future performance of the funds. The performance is calculated according to the OeKB method. The performance assumes a full reinvestment of the distribution and takes into account the management fee and any performance-related remuneration. The one-off front-end load that may be incurred upon purchase and any individual transaction-related or ongoing income-reducing costs (e.g. account and custody account fees) are not included in the presentation.

Institutional share classes

AT0000A1W4B7 = Distributing share (A)
AT0000A1W4C5 = Accumulating share (VT)

Retail share classes

AT0000A05HQ5 = Distributing share (A)
AT0000A05HS1 = Accumulating share (VT)

ERSTE BOND EM CORPORATE IG

Note: Performance chart since fund launch. Past performance does not allow any reliable conclusions to be drawn about the future performance of the funds. The performance is calculated according to the OeKB method. The performance assumes a full reinvestment of the distribution and takes into account the management fee and any performance-related remuneration. The one-off front-end load that may be incurred upon purchase and any individual transaction-related or ongoing income-reducing costs (e.g. account and custody account fees) are not included in the presentation.

Institutional share classes

AT0000A1Y9D0 = Distributing share (A)
AT0000A1Y9H1 = Accumulating share (VT)

Retail share classes

AT0000A0WJX7= Distributing share (A)
AT0000A0WJZ2 = Accumulating share (VT)

ERSTE RESPONSIBLE BOND EM CORPORATE

Note: Performance chart since fund launch. Past performance does not allow any reliable conclusions to be drawn about the future performance of the funds. The performance is calculated according to the OeKB method. The performance assumes a full reinvestment of the distribution and takes into account the management fee and any performance-related remuneration. The one-off front-end load that may be incurred upon purchase and any individual transaction-related or ongoing income-reducing costs (e.g. account and custody account fees) are not included in the presentation.

Institutional share classes

AT0000A1PY56 = Distributing share (A)
AT0000A2MKX2 = Accumulating share (VT)

Retail share classes

AT0000A13EF9 = Distributing share (A)
AT0000A13EH5 = Accumulating share (VT)

Overview performance contribution in %

Performance contribution at country level

(relative to the benchmark)

Performance contribution at share level

(relative to the benchmark)

Source: Erste AM; Calculation period December 2025; Contribution to gross excess returns in %, Fund: ERSTE BOND EM CORPORATE, Benchmark: J.P.Morgan CEMBI Broad Diversified Composite Index hedged in EUR; Gross performance data (without deduction of management fee); The companies listed here have been selected as examples and do not constitute an investment recommendation. In the context of active management, the above portfolio positionings may change at any time. 

Fund management

Lead-Manager Péter Varga

...has been a member of the Credits team at Erste Asset Management since 2005. As a Senior Professional Fund Manager, he is responsible for various emerging market corporate bond strategies in the team. He has more than 20 years of investment experience. Before joining the company, Péter Varga was responsible for convertible bond and corporate bond funds and the management of two total return funds at Union Investment (Frankfurt/M.).

Co-Manager Thomas Oposich

...is a senior fund manager in the fixed income division of Erste Asset Management. His current focus is on emerging market corporate bonds. Thomas Oposich has been with the company since 2005 and has many years of experience in bond management. During his career, he has been responsible for a broad range of bond funds consisting of US government, money market and corporate bonds, as well as mortgage-backed securities and euro government bonds.

Co-Manager Agne Loibl

...has been with Erste Asset Management since 2010. As a Senior Fund Manager in the Credits team, she is responsible for emerging market investment grade corporate bonds and the Asian markets. Agne Loibl has extensive experience in the area of credits. She started her career in research at ESMT Customized Solutions in Berlin and moved to Risk Management Securitisations at Erste Bank in 2007. 

Relevant new issues

No relevant new issues.

Overview Erste AM EM corporate strategies

Source: Erste Asset Management; Data as of 30.11.2025

Ratings

For a further analysis, you can view our fund at:

Morning Star Rating:                4 Stars
Morning Star Sust. Globes:     3 Globes
Scope Rating:                           A – 69/100

Risk notes for the mentioned funds

Disclaimer

This document is an advertisement. Please refer to the prospectus of the UCITS or to the Information for Investors pursuant to Art 21 AIFMG of the alternative investment fund and the Key Information Document before making any final investment decisions. All data is sourced from Erste Asset Management GmbH, unless indicated otherwise. Our languages of communication are German and English.

The prospectus for UCITS (including any amendments) is published in accordance with the provisions of the InvFG 2011 in the currently amended version. Information for Investors pursuant to Art 21 AIFMG is prepared for the alternative investment funds (AIF) administered by Erste Asset Management GmbH pursuant to the provisions of the AIFMG in connection with the InvFG 2011.

The fund prospectus, Information for Investors pursuant to Art 21 AIFMG, and the Key Information Document can be viewed in their latest versions at the  web site www.erste-am.com within the section mandatory publications  or obtained in their latest versions free of charge from the domicile of the management company and the domicile of the custodian bank. The exact date of the most recent publication of the fund prospectus, the languages in which the fund prospectus or the Information for Investors pursuant to Art  21 AIFMG and the Key Information Document are available, and any additional locations where the documents can be obtained can be viewed on the web site www.erste-am.com. A summary of investor rights is available in German and English on the website www.erste-am.com/investor-rights as well as at the domicile of the management company.

The management company can decide to revoke the arrangements it has made for the distribution of unit certificates abroad, taking into account the regulatory requirements.

Detailed information on the risks potentially associated with the investment can be found in the fund prospectus or Information for investors pursuant to Art 21 AIFMG of the respective fund. If the fund currency is a currency other than the investor's home currency, changes in the corresponding exchange rate may have a positive or negative impact on the value of his investment and the amount of the costs incurred in the fund - converted into his home currency.

Our analyses and conclusions are general in nature and do not take into account the individual needs of our investors in terms of earnings, taxation, and risk appetite. Past performance is not a reliable indicator of the future performance of a fund. Please note that investments in securities entail risks in addition to the opportunities presented here. The value of shares and their earnings can rise and fall. Changes in exchange rates can also have a positive or negative effect on the value of an investment. For this reason, you may receive less than your originally invested amount when you redeem your shares. Persons who are interested in purchasing shares in investment funds are advised to read the current fund prospectus(es) and the Information for Investors pursuant to § 21 AIFMG, especially the risk notices they contain, before making an investment decision.

Please consult the corresponding information in the fund prospectus and the Information for Investors pursuant to Art 21 AIFMG for restrictions on the sale of fund shares to American or Russian citizens. Misprints and errors excepted.

The public sale of shares in the specified fund in Germany was registered with the Federal Financial Supervisory Authority, Bonn, pursuant to the German Kapitalanlagegesetzbuch (KAGB). The issue and redemption of unit certificates and the execution of payments to unit holders has been transferred to the Fund's custodian bank/depositary, Erste Group Bank AG, Am Belvedere 1, 1100 Vienna, Austria. Redemption requests can be submitted by investors to their custodian bank, which will forward them to the Custodian Bank/Depositary of the Fund for execution via the usual banking channels. All payments to investors are also processed via the usual banking clearing channel with the investor's custodian bank.. In Germany, the issue and return prices of shares are published in electronic form on the web site www.erste-am.com (and also at www.fundinfo.com). Any other information for Shareholders is published in the Bundesanzeiger, Cologne.

Presentations:

It is expressly noted that presentations shall not be construed as providing investment advice or investment recommendations; presentations simply represent the current market opinion. The presentations are not intended as sales instruments and shall therefore not be construed as an offer to buy or sell financial or investment instruments. The investor shall be solely responsible for any and all decisions that he makes on the basis of this presentation.