After a slightly weaker January 2024 relative to the iBoxx $ Treasuries, the performance of the iBoxx LSF USD African Sovereigns surpassed that of U.S. Treasuries from February onwards. The gap narrowed briefly in August, before widening substantially following the U.S. Federal Reserve’s interest rate cuts. The iBoxx LSF USD African Sovereigns finished the year with a 10.55% gain compared to U.S. Treasuries’ 0.49%.
In general, 2024 was a good year for the performance of emerging markets sovereign bonds, especially in the high yield segment. As seen in Exhibit 2, the four emerging markets sovereigns high yield indices delivered positive returns of at least 10% in 2024. Over the three-year period, the broader iBoxx USD Emerging Markets Broad Sovereigns High Yield outperformed the iBoxx LSF USD African Sovereigns by 1.08%. Over the five-year period, the iBoxx LSF USD African Sovereigns outperformed the broad index by 12.97%.
