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2 minutes to read by  BlueBay Fixed Income Team Jan 8, 2026

December Review

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  • Risk markets generally performed well in December, capping a volatile yet positive year for most risk assets. Emerging Market (EM) assets led the charge, topping yearly performance charts across equity and fixed income. Within EM, Latin America dominated headlines: US-Venezuela tensions escalated amid US military actions and sanctions; Colombia confronted ELN attacks and fiscal emergency measures; Chile’s President-elect Kast championed pro-market reforms, while Brazil’s 2026 election volatility surged as Flavio Bolsonaro gained traction despite fragmented conservative backing. The macro backdrop remained supportive, with easing inflation in major economies and 25-bps rate cuts from the US Federal Reserve and Bank of England. The S&P 500 lagged, closing flat for the month, as investors rotated from tech after its robust rally. Meanwhile, EM equities and the Euro Stoxx 50 outperformed, delivering returns of 2.7% and 2.2%, respectively.

  • Looking to EM, credit markets saw gains of +0.48% in corporates and +0.72% in sovereigns, predominantly driven by high yield assets. Spreads tightened by 14 bps for corporates and 16 bps for sovereigns. Within corporates, the Transport, Metals & Mining and Consumer sectors outperformed, while TMT, Oil & Gas and Diversified sectors were the main laggards. In sovereigns, Africa and Latin America were the top-performing regions. Local markets also delivered positive returns, with the index up by +1.49% for the month. This was driven by strong performance in both FX and Rates, which returned +0.88% and +0.61% respectively. At the country level, South Africa, Turkey and Uruguay contributed to the positive strength. However, Brazil and Colombia detracted from returns over the period.

Download this article for the full market review, market outlook, and latest performance.

Disclosure
This material is provided by RBC Global Asset Management (RBC GAM) for informational purposes only and may not be reproduced, distributed or published without the written consent of RBC GAM or its affiliated entities listed herein. This material does not constitute an offer or a solicitation to buy or to sell any security, product or service in any jurisdiction; nor is it intended to provide investment, financial, legal, accounting, tax, or other advice and such information should not be relied or acted upon for providing such advice. This material is not available for distribution to investors in jurisdictions where such distribution would be prohibited.

RBC GAM is the asset management division of Royal Bank of Canada (RBC) which includes RBC Global Asset Management Inc. (RBC GAM Inc.), RBC Global Asset Management (U.S.) Inc. (RBC GAM-US), RBC Global Asset Management (UK) Limited (RBC GAM-UK), and RBC Global Asset Management (Asia) Limited (RBC GAM-Asia), which are separate, but affiliated subsidiaries of RBC.

In Canada, this material is provided by RBC GAM Inc. (including PH&N Institutional), each of which is regulated by each provincial and territorial securities commission with which it is registered. In the United States, this material is provided by RBC GAM-US, a federally registered investment adviser. In Europe this material is provided by RBC GAM-UK, which is authorised and regulated by the UK Financial Conduct Authority. In Asia, this material is provided by RBC GAM-Asia, which is registered with the Securities and Futures Commission (SFC) in Hong Kong.

Additional information about RBC GAM may be found at www.rbcgam.com.

This material has not been reviewed by, and is not registered with any securities or other regulatory authority, and may, where appropriate and permissible, be distributed by the above-listed entities in their respective jurisdictions.

Any investment and economic outlook information contained in this material has been compiled by RBC GAM from various sources. Information obtained from third parties is believed to be reliable, but no representation or warranty, express or implied, is made by RBC GAM, its affiliates or any other person as to its accuracy, completeness or correctness. RBC GAM and its affiliates assume no responsibility for any errors or omissions in such information.

Opinions contained herein reflect the judgment and thought leadership of RBC GAM and are subject to change at any time. Such opinions are for informational purposes only and are not intended to be investment or financial advice and should not be relied or acted upon for providing such advice. RBC GAM does not undertake any obligation or responsibility to update such opinions.

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Past performance is not indicative of future results. With all investments there is a risk of loss of all or a portion of the amount invested. Where return estimates are shown, these are provided for illustrative purposes only and should not be construed as a prediction of returns; actual returns may be higher or lower than those shown and may vary substantially, especially over shorter time periods. It is not possible to invest directly in an index.

Some of the statements contained in this material may be considered forward-looking statements which provide current expectations or forecasts of future results or events. Forward-looking statements are not guarantees of future performance or events and involve risks and uncertainties. Do not place undue reliance on these statements because actual results or events may differ materially from those described in such forward-looking statements as a result of various factors. Before making any investment decisions, we encourage you to consider all relevant factors carefully.

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© RBC Global Asset Management Inc., 2026
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