High-yield emerging market debt just keeps proving its worth. Take VEMY—a Stone Harbor fund that most investors haven't even heard of. The fund's exposure to Venezuela bonds has been remarkably profitable, especially when paired with positions in Lebanon and Ecuador debt. Over the past three years? 50% returns. That outpaces EMHY, a much more widely followed counterpart.

It's a reminder that sometimes the quieter plays in emerging market debt deliver outsized gains when geopolitical situations shift. Venezuela, Lebanon, Ecuador—these aren't your typical bond holdings, yet the fund's concentrated bets have paid off handsomely for shareholders willing to stomach the volatility.

What makes this interesting isn't just the headline return, but how unconventional positioning in distressed sovereigns can create alpha when markets eventually reprice these assets.