WisdomTree Investments (NasdaqGM: WETF) on Thursday launched the first exchange traded fund that invests in emerging market corporate bonds.
WisdomTree Emerging Markets Corporate Bond Fund (NasdaqGM: EMCB) covers corporate bonds in Asia, Latin America, Eastern Europe, Africa and the Middle East. The new ETF has an expense ratio of 0.60% and will be actively managed.
“These bonds are supported by the same favorable growth rates, attractive demographics, and improving fundamentals which have driven strong relative returns in emerging market assets in general,” said Bruce Lavine, WisdomTree chief operating officer.
Bond manager and Legg Mason (NYSE: LM) subsidiary Western Asset Management is a sub-advisor to the fund.
“While the investment process begins with an assessment of the macro and country-specific risks, company-specific factors may drive emerging market corporate bond returns to a larger extent than country-level issues as sovereign risk trends lower in this asset class over time,” said Matthew Duda, portfolio manager at Western Asset, in a press release.
“We therefore combine top-down macroeconomic analysis with bottoms-up fundamental analysis of the industries and corporations essential to the ongoing industrialization and development of the emerging world,” he added.
Assets in bond ETFs have jumped by about 38% over the past year, driven in part by the soaring popularity of corporate bond funds. [Bond ETF Assets Rise Nearly 40% in a Year]