According to a prospectus filing, the underlying index includes bonds issued by 18 governments, including Brazil, Chile, China (Offshore), Colombia, the Czech Republic, Hungary, Indonesia, Israel, Malaysia, Mexico, Peru, the Philippines, Poland, Russia, South Africa, South Korea, Thailand and Turkey.

Since the emerging market local debt portfolio is issued in bonds denominated in the local currencies of their respective emerging markets, the bond ETF is subject to currency risks – a strong U.S. dollar would weigh on the performance of the local debt ETF.

PowerShares also offers a U.S.-dollar denominated emerging market bond, PowerShares Emerging Markets Sovereign Debt Portfolio (NYSEArca: PCY).

PFEM will also be competing against other local currency emerging market debt ETFs, including WisdomTree Emerging Markets Local Debt Fund (NYSEArca: ELD), Market Vectors Emerging Markets Local Currency Bond ETF (NYSEArca: EMLC), iShares Emerging Markets Local Currency Bond ETF (NYSEArca: LEMB) and SPDR Barclays Emerging Markets Local Bond ETF (NYSEArca: EBND).

For more information on new product launches, visit our new ETFs category.

Max Chen contributed to this article.