Summary

• Frontier markets debt demonstrated quiet strength in the first quarter, with hard currency declining only 0.75% and local currency delivering a solid 2.2% return.
• Returns are increasingly driven by high real yields and country-specific fundamentals rather than broad beta.
• Rate cuts are becoming more targeted, but we believe supportive fundamentals and improved policy credibility keep the backdrop constructive.

Despite heightened volatility from the ongoing conflict in the Middle East, frontier emerging markets debt showed its quiet strength in the first quarter.

Hard currency frontier debt^[1] declined modestly by 0.75%, with performance driven largely

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