Never been better: VanEck's Eric Fine says the time has come for emerging markets
This interview was filmed on Thursday 19 June 2025.
One of the biggest casualties of the recent trade war and ongoing volatility has arguably been the reputation of the US dollar.
While nothing has really changed fundamentally, perception has now caught up with reality.
Eric Fine, emerging markets fixed income portfolio manager at VanEck, says this has opened up the conversation he’s long been trying to have with investors.
“It had been somewhat of a taboo subject to discuss the status of the dollar or treasuries as a reserve asset in the last six months,” said Fine.
“What's really changed and what's really helped is this is no longer a difficult story for a lot of investors in the US, Europe and Australia. Investors are reading about risks to the US, fiscal risks to US monetary [policy] and the status of the dollar.”
And it took this broader reassessment of the US dollar to open the door to the emerging markets (EM) story. It’s a story Fine has been telling for a long time. Now people are paying attention.
“We've been saying the same thing for 10 years,” says Fine.
“EMs have low debt that allows their central bank to be independent and pay high real rates, keep their currencies strong, and that just keeps continuing. We said it 10 years ago and the performance backed it.”
A long-term emerging markets evangelist, Fine believes the macroeconomic backdrop for EM has “never been better”.
You’ll need to watch the full interview above to hear Fine’s wide-ranging and informative outlook on the current state of play for emerging markets, but here are some of the key takeaways.

3 things to keep an eye on
Amidst the ever-shifting news headlines, the most important factors Fine is watching right now are the fate of US treasuries, especially 30-year yields, the Chinese yuan, and the asset price dislocation that’s occurring between interest rates, stocks and the dollar.
The yuan specifically is a “major sleeper issue”, according to Fine.
“It's arguably the most important thing going on in the world.
Since Trump got elected, the daily fixes have been stronger than the bank predicted levels. FX has been incredibly stable. If that continues, or if CNY revalues as we expect it to, that reprices global FX", he adds.
It’s part of a larger story around asset allocation and where global liquidity is going, and where it’s leaving, notably the US dollar.
“It's bad enough when US interest rates are going up and the dollar is going down,” said Fine. “But when it's interest rates up, dollar down and stocks down, that's an even broader exit potentially.”
But it’s not all bad news for the US dollar.
“I think the right attitude is that the dollar is not going to lose its reserve status, but it will share it with other deserving currencies like CNY, which is clearly the Chinese government's plan,” says Fine.
The Western bias
There’s a certain occidental lens through which we view the current geopolitical situation.
All the big economic stories are framed through a Western focus, when they often have much different impacts in emerging markets.
“We in the west see geopolitics and we say, ‘oh, the world's deglobalising. What a crazy world it is.’ Well, not if you're an EM.”
While the West frets about rising oil prices, Fine says Russia is now building its oil pipelines east towards China and India, meaning they pay much less for oil.
Many EMs also benefit from the elevated commodity prices caused by the recent geopolitical conflict.
“Every crisis in the last 20 years has been a developed market crisis.”
How they’re investing
VanEck’s EBND fund is a blend fund, investing in both local currency bonds and dollar-denominated bonds currently at a 60/40 split.
“Our big view is that local currency EM bonds have a lot of upside,” says Fine. He points to South Africa, Brazil and Malaysia as examples.
On the dollar side, it’s about avoiding too much correlation with US markets.
“Everyone in the world is long corporates and US spreads,” says Fine. “In dollar bonds, we do not like spread duration. We want short-dated and we want to get paid.”
According to Morningstar data, EBND is the best-performing bond ETF in Australia over one and three years, says Fine.

“Performance has been fantastic,” he says, but it might take even more for investors to cotton on.
“The interesting thing is that's often not enough. It's not enough to just do really, really well.”
One catalyst could be an end to the elevated returns of the stock market. Another is the growing recognition that the US dollar is dropping and treasuries aren’t protecting you.
“If the dollar's going down, something's going up against it, and it's our currencies. The real thing is avoiding those developed markets and being in the EM markets where their rates are going down and their currencies are getting stronger.”
Australia's best-performing bond ETF
EBND aims to provide investors with a globally diversified portfolio of bonds and currencies in emerging markets.
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