Globally, yields on high-quality assets feel thin once adjusted for inflation and tax. Corporate balance sheets look sound, yet spreads are tight and carry is limited. Under such circumstances, emerging market debt offers a clear payoff profile. There is income and promising potential for capital gains through policy easing, currency strength, and credit improvement. The asset class is broader and deeper than a decade ago, with stronger institutions in many countries and a larger local investor base. That mix supports resilience through shocks.

Corporate spreads have reached multi-year lows in many parts of the world. In European investment grade, spreads are below 90 basis points, a level not seen since 2021, and European high yield spreads of 270 bp have not been seen, since 2017. The situation is not very different in the US, with investment grade at around 80 bp and high yield at 280 bp. This raises the question: is there still value for investors buying into credit now?

Electricity is gaining strategic importance in the global energy system. This is not because electricity is a primary energy source, but because the mix of energy sources used to produce it is changing. In particular, the share of oil in electricity generation is falling, replaced by a growing mix of renewables, gas, and nuclear power. This shift not only changes how electricity is produced, but also reshapes the inflationary dynamics historically linked to oil, and consequently its potential impact on interest rates.