In fairness to ELD and EMLC, these are not the only emerging markets bond ETFs that have been struggling. The dollar-denominated PowerShares Emerging Markets Sovereign Debt Portfolio (NYSEArca: PCY) has also lost 9% in the past three months as investor fears of sovereign debt downgrades in the developing world have jumped.
Although ETFs such as ELD, EMLC and PCY are beaten up, history has shown that when emerging debt slumps in a given quarter, the following quarter is usually more kind. Some reversion to the mean could be exactly what the doctor ordered for emerging markets bonds as an assets class.
Market Vectors Emerging Markets Local Currency Bond ETF
ETF Trends editorial team contributed to this post.