GEMs Flow Talk Sentiment remains bullish, but investors remain concerned about performance

GEMs Flow Talk Sentiment remains bullish, but investors remain concerned about performance

Tough week. EXD suffered outflows, while LDM was flat. US IG & US HY had outflows too. 17 September 2026 EPFR flows (% of AUM), including US IG funds that invest strictly in Corporates GEM Fixed Income Strategy All ex CN EXD LDM ex CN Blend EM Eqty US HY US IG ETF EXD ETF LDM Global 1w -0.1% -0.2% 0.0% 0.2% 0.0% -0.5% -0.3% -0.5% -0.1% YTD 5.6% 2.9% 7.9% 12.7% 5.4% 1.5% 9.5% 2.2% 18.4% 2025 3.5% 1.3% 8.8% 4.3% 3.5% 6.3% 6.5% 6.7% 26.3% 2024 -8.0% -6.5% -10.9% -8.9% -0.1% 9.0% 11.2% -4.7% -16.3% Jane Brauer Sovereign Debt FI Strategist Trend 1↘ 1↘ -- 11↗ 2-- 1↘ 1↘ 1↘ 2↘ BofAS Source: BofA Global Research, EPFR, Inc. Note: Trend is # of consecutive wks up or down – shown 1w, YTD, FY 2025 & FY 2024 BofA GLOBAL RESEARCH Lucas Martin, CFA Sovereign Debt FI Strategist Marketing? See Debt Facts p2 Market positive stats ’25-‘26 vs negative ’20-‘23. BofAS

BofA EXD Sentiment Indicator: Our new BofA EXD Sentiment Indicator remains bullish (-0.44), but is not quite flashing an outright Buy designation (-0.5). Our new BofA LDM debt funds ex China weekly flows EXD Sentiment Indicator combines return, flow and issuance signals to identify LDM flows flat 0.0% of AUM (Sept‘24- sentiment extremes in EM EXD. Reduced HY supply and subdued inflows suggest Sept‘26) sentiment is poised to perk up, but fund returns and value remain concerns. See 2.0 Sentimental is the New Fundamental: The BofA EXD Sentiment Indicator % 1.5 Investors’ concerns: EM credit investors continue to be worried about future 1.0 performance. Main focus is on historically tight EM credit spreads, balancing FOMO vs 0.5 “Oh No!”, catalyst for spreads to move in either direction. The macro concerns that 0.0 investors think are driving all credit spreads: US rate risk, AI bubble, US IG supply risks. -0.5 -1.0 Local govt bond Foreign Holdings inflows. LatAm is YTD laggard with -$4bn, -1.5 EMEA+$35bn, Asia+$23bn. July ex-CN flows +$10.2bn, Winners: KR (Jul, Jun). Losers: IN. -2.0 Sep-24 Mar-25 Sep-25 Mar-26 Sep-26 Sept EXD gross issuance MTD is $39bn, down 27% vs Sept’25 MTD. Investors have cash for the issuance that did not come; 71% IG. 3 sovs issued. 50% from EMEA. Source: EPFR, Inc, BofA Global Research BofA GLOBAL RESEARCH We forecast the largest sovereign issuers for rest of 2026: Romani, Indon, Colom. See Exhibit 22. EXD debt funds weekly flows EXD flows down -0.2% of AUM (Sept‘24- Exhibit 1: Sentiment Indicator flags EXD spread compression, now at -0.44, not at sentiment levels Sept‘26) historically associated with an outright Buy designation (-0.5) BofA EXD Sentiment Indicator, estimated using EXD fund returns, issuance and inflow data 1.0 % Sep-24 Mar-25 Sep-25 Mar-26 Sep-26 Source: BofA Global Research The indicator identified as the BofA EXD Sentiment Indicator is intended to be an indicative metric only and may not be used for Source: EPFR, Inc, BofA Global Research reference purposes or as a measure of performance for any financial instrument or contract or otherwise relied upon by third parties for BofA GLOBAL RESEARCH any other purpose, without the prior written consent of BofA Global Research. This indicator was not created to act as a benchmark. BofA GLOBAL RESEARCH Quick Links : <Foreign Holdings of LDM> <LDM Asset Trading ideas and investment strategies discussed herein may give rise to significant risk and are not suitable for all investors. Investors should have experience in relevant markets and the financial Manager Tracker> <China> resources to absorb any losses arising from applying these ideas or strategies. <EXD Issuance/Supply> <EPFR Flows> BofA Securities does and seeks to do business with issuers covered in its research <Ratings> <40 Flows & Issuance Charts> reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Refer to important disclosures on page 21 to 23.

Exhibit 2: EM Debt Facts at your fingertips Positive and negative market stats Positive technicals of EM investing…