Emerging markets bonds exchange traded funds, both the dollar-denominated and local currency varieties, have come under significant pressure this year. Investors have not been shy about pulling capital from these funds amid fears that tapering of the Federal Reserve’s quantitative easing program would crush leveraged developing markets that had freely borrowed in previously weak U.S. dollars.

Translation: Asian sovereign debt, particularly from the region’s emerging economies, may not be first on bond investors’ lists of safe-haven plays. However, while Asian bond markets are still far behind the U.S. and Europe on the perceived safety scale, attractive debt-to-GDP ratios and strong yields bolster the case for an ETF like the WisdomTree Asia Local Debt Fund (NYSEArca: ALD).

In fact, a recent study by the Bank of International Settlements confirms the notion that Asian debt is becoming a safe-haven.  Safe-haven ideas must be loosely correlated to other asset classes while not being too volatile or as Anthony Harrington puts it for Economy Watch “Investors need to be able to anticipate returns without having to peer through a fog of uncertainty.”

There have been instances when the near-term outlook for ALD has looked uncertain. The Asian Development Bank recently said in a report that there are lingering risks for debt issued by Emerging East Asia issuers. [This Region Could be Problematic for EM Bond ETFs]

“Growth in the region had been fueled by the easy availability of credit, which will now become more restricted,” the ADB said in the report. “Rising levels of corporate indebtedness also suggest that the impact of higher interest rates on the economy may be intensifying.”

Still, ALD has held up well relative to some dollar-denominated emerging markets bonds ETFs this year. Actually, ALD may not be getting the credit it deserves. With almost $540 million in assets under management, ALD is one of the most successful actively managed ETFs on the market, yet few investors seem to realize it is actively managed.