A stellar year for emerging-market bonds is set to get even better as the return of the “dollar debasement trade” amplifies inflows into the asset class, fund managers say. The resurgence of dollar weakness is driving renewed investor interest in emerging-market debt, which has already delivered strong performance this year. Fund managers note that the combination of attractive yields, improving credit fundamentals, and a softer U.S. dollar dynamics is creating a favorable environment for inflows.

This trend is expected to sustain momentum into the coming months, with emerging-market bonds benefiting from both tactical and strategic allocation shifts. The asset class continues to draw attention as a hedge against currency depreciation and a source of diversification in global portfolios.