Summary

• Diversifying into foreign bonds hasn’t provided much benefit to U.S. investors since the Middle East conflict began, with one exception: high‑yield corporate bonds issued by firms in emerging markets.
• Bucking the trend since the conflict started on Feb. 28, the VanEck Emerging Markets High Yield Bond ETF (HYEM) is a rare bright spot in international fixed income from a US dollar-based investment perspective.
• Analysts say high‑yield bonds have regained appeal thanks to their sizable coupons, which provide a meaningful yield cushion against market volatility.

Diversifying into foreign bonds hasn’t provided much benefit to U.S. investors since the Middle East conflict began, with one exception: high‑yield corporate bonds issued by firms in emerging markets.

Bucking the trend since the conflict

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