#credit-spreads

#credit-spreads

EMB owns USD-denominated sovereign bonds from countries like Mexico, Saudi Arabia, Turkey, and Indonesia, which means every bond in the portfolio is priced as a spread over the US Treasury curve. The benchmark to monitor is the 10-year Treasury yield, near 4.4%, sitting at the 77.6th percentile of its 12-month range. The Fed has held its target rate at 3.75% since December 11, 2025, a 75 basis point cut from a year ago, and that pause is what has anchored EM spreads.

Ellington Financial delivered an exceptionally strong first quarter in terms of both GAAP net income and adjusted distributable earnings, even in the face of rising market volatility and widening credit spreads, he said. Penn added that adjusted distributable earnings widely exceeded the company's dividend, with ADE reaching 55 cents per share during the quarter.

The fund blends high yield corporate bonds, senior loans, and debt tranches of U.S. collateralized loan obligations (CLOs) into a single actively managed portfolio, aiming to deliver income that beats the broad bond market while keeping volatility lower than any single segment on its own.