BlackRock and JPMorgan bet on emerging markets amid global bond turmoil

When BlackRock and JPMorgan start agreeing on a trade, the rest of the market tends to pay attention. Both firms have been quietly building positions in emerging market debt while pulling back from US bonds, a shift that looks increasingly prescient as global fixed-income markets continue to churn. BlackRock’s global fixed-income Chief Investment Officer Rick Rieder began scaling back exposure to US investment-grade and high-yield bonds in February 2026, citing more favorable valuations in emerging markets and a weakening dollar. JPMorgan Asset Management’s Bob Michele has been singing a similar tune, pointing to what he describes as very high real yields in EM local debt as a continuing opportunity. The numbers behind the rotation The case for EM debt isn’t abstract. Local emerging market government bonds posted more than 15% returns in 2025, powered by dollar weakness and Federal Reserve rate cuts. That performance drew over $60 billion in inflows into related funds during the year. BlackRock’s mid-year outlook in July 2026 formalized the thesis: the firm shifted EM local-currency debt to a small overweight position while moving equities and hard-currency debt to neutral. Michele...