Also in this category is the emerging market corporate debt ETF, the WisdomTree Emerging Markets Corporate Bond ETF (NYSEArca: EMCB) which invests in high quality multi-national corporations with good credit ratings. Corporate bonds could be a good option for investors desiring a good yield, lower interest-rate risk, and U.S. dollar exposure, reports Strauts. [Podcast: Emerging Market Bond ETFs]
The largest risk to investing in overseas emerging market debt is the currency exposure. By investing in government debt denominated in U.S. dollars, there is less need for hedging currency risk. Overall, the fact remains that many emerging markets have balance sheets that look much healthier than those of developed counterparts. [ETF Spotlight: Emerging Market Debt]
Tisha Guerrero contributed to this article.
Full disclosure: Tom Lydon’s clients own EMB.