“We see people talking on an institutional level in both the ETF and active management world about the increasing importance of local currency government debt in their portfolios,” Scott Ebner, managing director and global head of ETF product development at State Street, said.
State Street believes that local currency debt provides diversification, higher yields, potential returns from foreign currency appreciation and access to emerging market growth and creditworthiness.
- WisdomTree Emerging Markets Local Debt (NYSEArca: ELD)
- Market Vectors Emerging Markets Local Currency Bond ETF (NYSEArca: EMLC)
- SPDR Barclays Capital Emerging Markets Local Bond ETF (EBND)
- iShares Emerging Markets Local Currency Bond Fund ETF (LEMB)
Still, ETF investors who do not want the added currency risk may opt for emerging market debt denominated in the U.S. dollar. [Emerging Market Bond ETFs that Hedge Currency Risks]
- JP Morgan Emerging Markets Bond Fund (NYSEArca: EMB)
- PowerShares Emerging Markets Sovereign Debt Portfolio (NYSEArca: PCY)
WisdomTree Emerging Markets Local Debt
For more information on bond funds, visit our bond ETFs category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own EMB.