Cathy Hepworth, who heads $1.5 trillion asset manager PGIM's emerging-markets debt team, doesn't hesitate when asked about her highest-conviction theme across the developing world: "Carry, carry, carry."She's referring to a popular but often risky trade in which investors borrow cheaply in currencies like the US dollar, Japanese yen, or euro, and put the money to work in higher-yielding currencies like the Turkish lira, where interest payments on bonds or money-market funds can be as much as 40% or higher.Carry trades funded by the US dollar are on their longest winning run since 2008, yielding positive returns for a seventh successive quarter."It's a carry world," said Hepworth, who joined PGIM in 1989 and helped establish its emerging-markets debt management effort in 1995. "There's a ton of money looking for yield."Read more: West Bengal plans incentives to spur industrial investmentsThe emerging-market carry trade has returned about 22% since the end of 2024, according to a Bloomberg gauge of eight major EM currencies, handily beating all other major classes of global bond trades. Investing in US Treasuries has earned just 5.9% over the same period, while dollar bonds from developing world governments returned 14% and EM corporate debt 10%. Returns have been amplified by a dollar that's weakening against major emerging-market currencies outside Asia and cheapening versus low-rate peers like the euro and Swiss franc also used to fund carry trades. That makes for a heady mix in Colombia, which offers a 12% bond return with 45% spot appreciation. Even in Turkey, where the lira has lost 26% against the dollar, yields above 32% on 10-year local bonds have kept investors in profit.