June 2026 delivered sharp cross-country dispersion, with technology-heavy markets and duration proxies generally outperforming commodity and domestic-demand stories. FX moves were material in several EMs, either amplifying equity drawdowns or reinforcing bond-led rallies.
We keep a balanced risk stance, leaning into markets where ML equity and bond sleeves trend in the same direction and FX is supportive, while fading markets showing equity stress, negative FX and only patchy bond resilience.
ML United States Equity Index returned +0.30% in June 2026, while ML United States Bond Index returned +0.36% in June 2026, pointing to a flat but still supportive cross-asset backdrop. Equities were narrowly led by technology, with HEWLETT PACKARD ENTERPRISE, DELL TECHNOLOGIES INC CLASS C and MARVELL TECHNOLOGY INC all surging, while STRATEGY INC CLASS A and health-care names ZOETIS INC CLASS A and INSMED INC lagged. On the credit side, higher-beta health-care and industrial credits such as OWENS & MINOR INC 144A 2029, MERCER INTERNATIONAL INC. 2029 and ACCENDRA HEALTH INC 144A 2030 outperformed, whereas stressed communications and industrial structures including FXI HOLDINGS INC 144A 2029 and CSC HOLDINGS LLC 144A 2028/2031 were clear underperformers.
ML United Kingdom Equity Index returned -3.07% in June 2026, while ML United Kingdom Bond Index returned +0.87% in June 2026, underscoring a rotation towards UK duration and away from domestic equity risk. UK equities were weak despite stock-specific gains in ANTOFAGASTA PLC, INTERCONTINENTAL HOTELS GROUP PLC and MARKS AND SPENCER GROUP PLC, with financials WISE PLC CLASS A and 3I GROUP PLC and industrial RENTOKIL INITIAL PLC weighing on the index. UK bonds fared better, led by VICTORIA PLC 2029, THAMES WATER UTILITIES FINANCE PLC 2029 and long benchmark UK CONV GILT 2073, while BCP V MODULAR SERVICES FINANCE PLC 2029, INEOS QUATTRO FINANCE 2 PLC 2030 and THAMES WATER UTILITIES FINANCE PLC 2034 underperformed.
| Country | Equity Index Return | Bond Index Return | FX vs USD | Stance |
|---|---|---|---|---|
| Taiwan | +9.59% | +0.51% | TWD +0.13% | Overweight |
| Colombia | +6.67% | +1.61% | COP +3.36% | Overweight |
| Saudi Arabia | +2.31% | +0.73% | SAR 0.00% | Overweight |
| Czech Republic | +1.98% | +1.41% | CZK -0.67% | Moderate Overweight |
| Peru | +1.72% | +1.81% | USD base | Overweight Bonds |
ML Taiwan Equity Index returned +9.59% in June 2026, while ML Taiwan Bond Index returned +0.51% in June 2026, with modest TWD strength marginally enhancing USD returns. Equity performance was dominated by a narrow technology surge in YAGEO CORP, INNOLUX CORP and INVENTEC CORP, while EMEMORY TECHNOLOGY INC and BIZLINK HOLDING INC lagged, reinforcing the need for stock selection. Bonds were stable, with TSMC ARIZONA CORP 2051 and 2052 and TSMC GLOBAL LTD 2027 modestly positive and no material underperformers, making Taiwan a high-conviction equity overweight with neutral duration exposure.
ML Colombia Equity Index returned +6.67% in June 2026, while ML Colombia Bond Index returned +1.61% in June 2026, and a 3.36% COP appreciation strongly amplified USD-based gains. Equity breadth is extremely narrow at three names, with GRUPO CIBEST PREF SA, INTERCONEXION ELECTRICA SA and GRUPO CIBEST SA all contributing; the small universe argues for position-size discipline. Bonds were the standout, led by COLOMBIA (REPUBLIC OF) 2029 and high-beta credits GRAN TIERRA ENERGY INC 2031 and AVIANCA MIDCO 2 PLC 2031, while BANCO DAVIVIENDA SA 2079 and ECOPETROL SA 2043/2045 lagged, supporting an overweight in sovereign and selected corporate paper.
ML Saudi Arabia Equity Index returned +2.31% in June 2026, while ML Saudi Arabia Bond Index returned +0.73% in June 2026, with a stable SAR leaving local returns largely unchanged in USD terms. Equities were led by AL-ELM INFORMATION SECURITY COMPAN, ACWA POWER CO and ALMARAI, while materials heavyweights SABIC AGRI-NUTRIENTS, YANBU NATIONAL PETROCHEMICALS and SAUDI BASIC INDUSTRIES dragged. On the bond side, long-dated sovereigns SAUDI ARABIA (KINGDOM OF) 2061, 2051 and 2047 outperformed, whereas DAR AL-ARKAN SUKUK COMPANY LTD 2029/2030 and ARABIAN CENTRES SUKUK III LTD 2029 were mild laggards, favouring an overweight to long sovereign curves over financial sukuk.
ML Czech Republic Equity Index returned +1.98% in June 2026, while ML Czech Republic Bond Index returned +1.41% in June 2026, slightly offset by a 0.67% CZK depreciation versus USD. Equities are concentrated in three stocks, with CEZ and MONETA MONEY BNK modestly positive and KOMERCNI BANK a clear laggard, suggesting idiosyncratic rather than macro-driven equity moves. Bonds rallied across the sovereign curve, led by CZECH REPUBLIC 2034, 2032 and 2031, while ALLWYN ENTERTAINMENT FINANCING (UK 2030 underperformed; the combination supports a moderate overweight in CZK duration more than equities.
ML Peru Equity Index returned +1.72% in June 2026, while ML Peru Bond Index returned +1.81% in June 2026; with USD as base currency, FX is neutral for global investors. Equities are again narrow, with SOUTHERN COPPER CORP the key positive driver and BUENAVENTURA ADR REPRESENTING slightly negative, keeping the sleeve more a single-name copper proxy. Bonds show broad sovereign strength, as PERU (REPUBLIC OF) 2031, 2032 and 2029 outperformed while KALLPA GENERACION SA 2032 and CONSORCIO TRANSMANTARO SA 2038 underperformed, reinforcing a preference for Peruvian sovereign duration rather than corporates.
| Country | Equity Index Return | Bond Index Return | FX vs USD | Stance |
|---|---|---|---|---|
| Indonesia | -19.58% | -0.51% | IDR -3.17% | Underweight |
| Turkey | -16.99% | -0.11% | TRY -1.61% | Underweight |
| Brazil | -15.63% | +0.08% | BRL -2.38% | Underweight Equities |
| Chile | -11.15% | +0.61% | CLP -0.20% | Underweight Equities |
| Malaysia | -7.08% | +0.14% | MYR -1.75% | Underweight |
ML Indonesia Equity Index returned -19.58% in June 2026, while ML Indonesia Bond Index returned -0.51% in June 2026, with a 3.17% IDR depreciation further hurting USD investors; this is a clear cross-asset risk-off signal. Equity losses were led by BUMI RESOURCES MINERALS, UNITED TRACTORS and BARITO PACIFIC, while even relative “winners” like TELEKOMUNIKASI INDONESIA, CHAROEN POKPHAND INDONESIA and BANK CENTRAL ASIA still declined, underscoring broad weakness. In bonds, selective strength in INDOFOOD CBP SUKSES MAKMUR TBK PT 2051, INDONESIA (REPUBLIC OF) 2051 and PERTAMINA PERSERO PT 2050 was outweighed by declines in shorter sovereigns such as INDONESIA (REPUBLIC OF) 2027 and 2028, justifying a material underweight across Indonesian risk.
ML Turkey Equity Index returned -16.99% in June 2026, while ML Turkey Bond Index returned -0.11% in June 2026, with TRY depreciation of 1.61% adding to USD losses. Equities saw sharp declines in BIM BIRLESIK MAGAZALAR A, ENKA INSAAT VE SANAYI A and AKBANK A, while EREGLI DEMIR VE CELIK FABRIKALARI was one of the few gainers and TURK HAVA YOLLARI AO A and TURKIYE IS BANKASI C still posted losses. Bonds showed a split curve: long-dated sovereigns such as TURKEY REPUBLIC OF (GOVERNMENT) 2045 and TURKEY (REPUBLIC OF) 2041/2040 gained, but ZORLU ENERJI ELEKTRIK URETIM AS 2030 and intermediate sovereigns TURKEY (REPUBLIC OF) 2030 and 2034 fell, keeping us underweight overall with any exposure focused only on long sovereign paper.
ML Brazil Equity Index returned -15.63% in June 2026, while ML Brazil Bond Index returned +0.08% in June 2026, but BRL depreciation of 2.38% eroded the modest bond gains in USD terms. Equities were hit hard by consumer and utility names, with JBS N V NV CLASS A, RAIA DROGASIL and CENTRAIS ELETR BRAS-ELETROBRAS PRE leading the declines, while ENGIE BRASIL ENERGIA SA, CIA VALE DO RIO DOCE SH and BB SEGURIDADE SA fell less but still failed to provide real ballast. Bonds were bifurcated, with AEGEA FINANCE SARL 2036/2031 and RAIZEN FUELS FINANCE SA 2054 performing strongly, but CSN RESOURCES SA 2032/2030/2031 sharply negative, supporting a stance of underweight equities and highly selective exposure in utilities and infrastructure credits.
ML Chile Equity Index returned -11.15% in June 2026, while ML Chile Bond Index returned +0.61% in June 2026, with a mild 0.20% CLP depreciation slightly dampening bond outperformance in USD terms. Equity weakness centered on LATAM AIRLINES GROUP SA, SOCIEDAD QUIMICA Y MINERA DE CHILE and PLAZA SA, partially offset by resilience in CENCOSUD SA and BANCO SANTANDER CHILE. In contrast, bonds rallied led by CHILE (REPUBLIC OF) 2033 and LATAM AIRLINES GROUP SA 2030/2031, while INVERSIONES CMPC SA 2034/2033 and CELULOSA ARAUCO Y CONSTITUCION SA 2032 underperformed, favouring a rotation from Chilean equities into sovereign and selected corporate duration.
ML Malaysia Equity Index returned -7.08% in June 2026, while ML Malaysia Bond Index returned +0.14% in June 2026, and MYR depreciation of 1.75% offset the small bond gains for USD investors. Equities were dragged down by financials and consumer staples such as CIMB GROUP HOLDINGS, KUALA LUMPUR KEPONG and IOI CORPORATION, with PRESS METAL ALUMINIUM HOLDINGS and banks RHB BANK and AMMB HOLDINGS merely declining less. Bonds showed moderate strength in RESORTS WORLD LAS VEGAS LLC 144A 2029 and PETRONAS CAPITAL LTD 2060/2055, while MALAYSIA (GOVERNMENT) 2032/2038/2029 weakened, pointing to a cautious stance with only selective exposure to high-quality agency and quasi-sovereign names.
| Country | Equity View | Bond View | FX Consideration | Implementation Bias |
|---|---|---|---|---|
| Taiwan | Overweight, tech-led with narrow leadership | Neutral to modest overweight, focus on high-grade TSMC complex | Slight TWD strength supportive | Prefer equity index plus select large-cap tech; keep bond duration moderate |
| Colombia | Small overweight with tight position sizing | Overweight sovereign 2029; selective high-beta corporates | Strong COP appreciation amplifies returns | Use hard-currency sovereigns and modest equity overlay |
| Saudi Arabia | Overweight, favouring tech, utilities and staples | Overweight long-dated sovereign sukuk | SAR stability reduces FX risk | Blend equity exposure with long sovereign sukuk; avoid weaker financial sukuk |
| Indonesia | Underweight across sectors | Underweight, avoid short sovereigns | IDR weakness a key risk amplifier | Maintain minimal exposure; if needed, confine to select long IG corporates |
| Turkey | Underweight; equity volatility high | Neutral to slight overweight in long sovereigns only | TRY depreciation adds downside tail risk | Access only via hard-currency long sovereigns; avoid local credit and equities |
| Brazil | Underweight; earnings and FX both fragile | Selective overweight in utilities and infrastructure bonds | BRL weakness erodes carry | Use credit selection (AEGEA, RAIZEN); avoid broad beta |
| Chile | Underweight; equity drawdown significant | Overweight sovereign 2033; selective corporates | Minor CLP drag on USD investors | Rotate from equities into duration-heavy sovereigns |
| Malaysia | Underweight; banks and staples under pressure | Neutral; prefer PETRONAS and selected external credits | MYR weakness blunts bond returns | Scale back equities; keep targeted agency/quasi-sovereign exposure |