Money has been switched around ever since global markets have hit their nadir, and lately, it’s been leaving U.S. equities. Which exchange traded funds (ETFs) have been getting this cash?
Research firm EPFR Global reported that net assets have been flowing out of U.S. equities, but money market funds did not benefit from those outflows, writes Gary Gordon for ETF Expert.
The money had to go somewhere, and go somewhere it did: to emerging market stocks and emerging market bonds. In fact, emerging market bonds raked in almost $1 billion in a single week. It was the largest weekly inflow ever on EPFR’s record books. (Six things you’re missing by not going global).
For more information on emerging markets, visit our emerging market category.
Here are three ways to invest in emerging market bonds now:
- PowerShares Emerging Mkts Sovereign Debt (NYSEArca: PCY): up 34% year-to-date; yields 6.08%; expense ratio of 0.5%; The fund is based on the DB Emerging Market USD Liquid Balanced Index. 90% of total assets are invested in securities. The Index tracks the possible returns of liquid emerging markets U.S. dollar-denominated government bonds issued by 22 emerging countries.
- iShares JPMorgan USD Emerg Markets Bond (NYSEArca: EMB): up 13.6% year-to-date; yields 5.69%; expense ratio of 0.6%; The fund seeks to reflect the investment results that reflect the price and yield performance of the JPMorgan EMBI Global Core Index, with bonds issued by 23 countries.
- Templeton Emerging Markets Income Fund (NYSE: TEI): up 53.5% year-to-date; yields 7.2%; TEI is a close-end fund (CEF) that trades on an exchange. TEI is not a dollar-denominated fund, which can prove fruitful if the U.S. dollar is weak. The fund invests in income-producing securities of sovereign or sovereign-related parties and companies in emerging market countries.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.