Emerging Market High Yield (EM HY) corporates was one of our top asset class picks within EM for 2024, and indeed, it played out well. We argue below that the case for investing in the asset class remains solid for 2025 with a compelling risk-reward outlook, both from fundamental and technical perspectives and with regard to opportunities for spread compression. Key points: As we enter a period of policy uncertainty and potential market volatility, owning assets that offer a healthy carry can provide an important buffer for investor portfolios. Active management can enable investors to capitalize on temporary market dislocations to pick up cheap assets. Such opportunities may enhance the long-term returns of a portfolio.