“Emerging markets have increased political and economic risks that make them more susceptible to default. For this increased risk, investors get higher relative yields,” says Morningstar analyst Timothy Strauts.

“In the past few years, emerging-markets equities and bonds have become a larger portion of investors’ portfolios. As of the end of September 2011, the emerging-markets debt category has seen $11.2 billion in new assets this year,” he added. “This demand is because of the tremendous economic growth in emerging markets compared with meager growth from the developed world. This is tremendous growth for such a small portion of the fixed-income market.”

WisdomTree Emerging Markets Local Debt


For more information on international sovereign debt, visit our international Treasury bonds category.

Max Chen contributed to this article.