The improving fundamentals of emerging market countries have helped fuel a rally in emerging market equities and bonds alike. However, the strong returns have raised questions as to whether the run-up in emerging market debt is sustainable. Sound government finances, gradual reform efforts and more flexibility when dealing with macroeconomic shocks are just a few of the reasons why investors may be optimistic about emerging markets in the long term. Another factor may be the low yield environment in developed markets. Despite returning more than 14% on a local currency basis and 9% on a U.S.-dollar basis this year through September, emerging market sovereign bond yields are still well above those in the U.S., Japan and Germany. For investors seeking more return from bonds in their portfolios, emerging markets may be the place to look.