Why emerging market bonds

Several heavily indebted property developers in China have come under pressure this year, but the impact in the bond market appears to be contained and has not spread to other sectors. Strong, ongoing underlying trends supporting EM validate our view that EM debt headwinds may be over stated.

Emerging markets debt exposure may result in a higher yielding portfolio and one that may be more resilient to future U. Global growth and improved fiscal outlooks at the forefront of increasingly positive trends in EM. Following a more hawkish Federal Reserve outlook, we believe there are several tailwinds that may allow EMFX to continue the rally that began in April.

Skip directly to Accessibility Notice. Emerging Markets Bonds. Read more. Select Year Bonds included in these funds may be government, quasi-government, or corporate debt.

Emerging markets bonds tend to have lower credit quality than those of developed nations, and thus generally offer much higher yields. Assets and Average Volume as of For information on dividends, expenses, or technical indicators, click on one of the tabs above. The table below includes fund flow data for all U.

Total fund flow is the capital inflow into an ETF minus the capital outflow from the ETF for a particular time period. Fund Flows in millions of U. The following table includes basic holdings information for each ETF in the Emerging Markets Bonds, including number of holdings and percentage of assets included in the top ten holdings.

When emerging-markets-bond returns started to increase, U. Lower interest rates tend to lure investors to pursue higher-yielding investments such as emerging-markets bonds. A look at select Morningstar fixed-income indexes reveals that emerging-markets bonds have brought in higher yields than U.

With the higher yields come higher credit risk. Compared with the Morningstar Global Core Bond Index, which maintains a much higher AA credit rating, rating agencies often consider emerging-markets-debt instruments to be much riskier than developed-markets fixed-income securities.

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Table of Contents Expand. What Is an Emerging Market Bond? Understanding Emerging Market Bonds. Special Considerations. Advantages and Disadvantages of Emerging Market Bonds. Key Takeaways Emerging market bonds are debt instruments issued by developing countries. These bonds tend to over higher yields than Treasuries or corporate bonds in the U. Investing directly in emerging market bonds can be difficult, but most U.

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