The emerging market debt (EMD) market has grown significantly (now representing more than 27% of the global bond market), while trading liquidity has improved – making it too big to ignore, in our view. Additionally, EMD provides an attractive yield pick-up from investment grade bonds while offering diversification benefits. In this paper, we dive into why we think investors should consider an allocation of 10–20% to hard currency EMD in their global bond portfolios (both USD hedged and unhedged) to enhance portfolio returns without significantly increasing volatility.