Emerging market equities and bonds have become standard in investors portfolios, as stronger economic growth in these countries is evident. Emerging market government issued bond exchange traded funds (ETFs) have increased in popularity due to their high yield and diversification benefits.

“With the sovereign debt crisis in Europe, investors are re-evaluating which countries are most creditworthy. The developed world has good credit ratings and very high debt levels. The emerging world has below-investment-grade ratings and low debt levels. There is growing belief that despite emerging markets’ lower credit ratings they may actually be better credit risks,” Timothy Strauts wrote in a Morningstar fund analysis.

The latest ETFs offer emerging market yields without the currency risk that is associated with overseas investing. Many emerging market governments and businesses issue debt securities denominated in U.S. dollars to attract international interest, reports ETF Base. [The Case for Emerging Market Bond ETFs]

Emerging market bond ETFs are riskier than U.S. government debt, however, the payoff comes in the form of higher yields. Many emerging market bond ETFs have yields around 5% or higher, compared to the 20-year US Treasury, for example, which yields only 2.4% while the 10-year provides only 1.71% annually. [Best ETFs for Dividend and Income]