Embracing Emerging Market Debt

This chapter explores fixed income opportunities with a focus on emerging market debt versus U.S. Treasury debt, including yield curve changes and optimal investment strategies. It emphasizes the attractiveness of international investments amidst overvalued U.S. markets while highlighting selective opportunities within domestic small-cap stocks and healthcare.

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Two Morningstar research leaders join Investing Insights to discuss whether US investors should consider international stocks and fixed income. They are Dominic Pappalardo, chief multi-asset strategist, and Philip Straehl, chief investment officer for the Americas, for Morningstar Wealth, part of registered investment adviser, Morningstar Investment Management.

Key Takeaways:

How the Markets Have Been Handling Volatility in 2025

Why Economic Data Has Stayed More Stable Than the Markets During Volatility

Why the Timing and the Scale of the Tariffs Were a Shock to the Market

Will International Stocks Outperform US Stocks?

Why Now Is the Time to Check Your International vs US Stock Allocation

Should Investors Broaden Their International Stock Exposure?

Why Global Consumer Stocks Are Poised to Perform Well During Market Volatility

How Rising Yields in Fixed Income Can Create Opportunities for Investors

How the Shape of the Yield Curves Have Shifted

How US Investors Can Mediate US Dollar Weakness With International Equity Exposure

Key Takeaways on the US Market Outlook vs International Market Outlook