This page examines performance metrics of emerging market (EM) debt. The chart on the left highlights the spreads between different EM government local rates and U.S. treasuries, as well as the country's local currency long-term debt credit ratings. A lower credit rating implies a higher risk of default, hence requiring higher yields to compensate for the risk. The right chart shows EM debt yields before and after hedging. While EM debt offers attractive yields, investors should be aware of currency hedging costs which may have a material impact on total returns.