This page examines performance metrics on 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 plots spread between EM sovereign bonds against subsequent 12-month performance. As shown, wider spreads suggest higher potential returns.