The carry trade landscape in emerging markets is shining brightly, leading to remarkable returns for investors. This approach, which entails borrowing in low-interest currencies and investing in higher-yielding emerging markets, thrives as the US dollar softens against numerous emerging market currencies. Colombia stands out with appealing bond returns and substantial currency gains, while Turkeys elevated local bond yields continue to beneficially impact investor outcomes even amidst currency depreciation.

Dollar-funded carry trades are on their longest winning streak since 2008, with Bloomberg's EM index returning 18% in 2025 amid historically low

The carry trade landscape in emerging markets is shining brightly, leading to remarkable returns for investors. This approach, which entails borrowing in low-interest currencies…