How Emerging-Market Bonds Can Hedge Against U.S. Market Volatility

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Mar 29, 2026

Eric Fine, portfolio manager and head of active emerging market debt at VanEck, explains why some emerging-market bonds may now offer stability compared with U.S. debt. He discusses fiscal dominance, which markets now look safer, and how commodity exporters and Gulf issuers fit into portfolios. The conversation highlights using EM bonds as a hedge against U.S. volatility and energy-driven inflation.

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ANECDOTE

Listener Voicemail Prefers Gold Over Oil

Listener Rajesh Patwa contrasted oil and gold as hedges, calling oil a tactical hedge for supply shocks and gold the stable long-term choice.
His voicemail emphasized gold's central bank demand and purchasing-power protection.

INSIGHT

US Investors Are Holding The Wrong Bonds

Many US investors own the wrong bonds for diversification right now, missing higher returns available elsewhere.
Eric Fine notes EM government bond benchmarks have returned ~2% a year while active EM strategies show higher carry around 7%.

ADVICE

Tilt Bond Portfolios Toward Commodity Exporters

Actively tilt bond allocations toward commodity-exporting EMs and avoid the vulnerable ones.
Fine says active managers can increase exposure to exporters and steer clear of countries harmed by current shocks.

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In this week's episode of WSJ’s Take On the Week, co-hosts Miriam Gottfried and Telis Demos break down the math behind current oil price fluctuations and what the market is signaling about the duration of the Iran conflict. Food manufacturers and producers ConAgra Brands, Cal-Maine Foods and McCormick are reporting their earnings this upcoming week. Will these companies continue to pass on some of their high expenses to customers or will they absorb the rising costs? And a couple of the show’s listeners share their takes on the oil vs. gold portfolio hedge.

After the break, Telis and Miriam are joined by Eric Fine, portfolio manager and head of active emerging market debt at global investment management firm VanEck. Fine explains the concept of fiscal dominance and why he believes the roles of developed and emerging markets have reversed. He makes the case for why bonds for countries like Brazil and Colombia may now offer more stability than U.S. Treasurys. Plus, they discuss why some emerging-markets strategies have been abandoned in favor of strict fiscal discipline.

This is WSJ’s Take On the Week where co-hosts Telis Demos, Heard on the Street’s banking and money columnist, and Miriam Gottfried, WSJ’s investing and wealth management reporter, cut through the noise and dive into markets, the economy and finance—the big trades, key players and business news ahead.

Have an idea for a future guest or episode? How can we better help you take on the week? We’d love to hear from you. Email the show at takeontheweek@wsj.com.

To watch the video version of this episode, visit our WSJ Podcasts YouTube channel or the video page of WSJ.com