Another important issue to consider with ETFs such as EMCB is sector exposure. David Spegel, head of emerging debt strategy at ING Bank, told Reuters that nearly two-thirds of developing world corporates bond issuance comes from energy and materials companies that have hard currency revenue hedges in place. With Russia, Brazil, Mexico and Colombia combining for almost 80% of EMCB’s country weight, it is not surprising that Oil, metals and materials issue represent a combined 59% of the ETF’s weight.
EMCB outperformed EMB last year as emerging markets companies sold $345 billion in debt.
WisdomTree Emerging Markets Corporate Bond Fund
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of EMB and LQD.