Emerging market sovereign debt makes up a substantial portion of the global asset universe, notable for its potential diversification advantage alongside developed market sovereign bonds. The MSCI Emerging Markets Sovereign Bond Index is tied to a total notional value of $1.1 trillion – an amount that has grown thanks to increased bond issuance from countries and regions like China and the Persian Gulf. With the exception of Turkey, the largest sovereign issuers in the index have maintained a sustainable level of public (foreign) debt relative to GDP and, therefore, a typical range of credit spreads.
How the total notional amount and composition of countries have evolved
The chart shows the total notional outstanding in billions of US dollars of the MSCI Emerging Markets Sovereign Bond Index over the period January 1, 2006 to January 2, 2024. Each country’s index weight is calculated at the start of each year .
