With Turkish citizens eager to dump lira in favor of dollars, euros and other foreign currencies, yields on the country’s 10-year sovereign bonds spiked to almost 10.5%, according to CNBC.
As those yields have soared, ETFs with significant allocations to Turkish debt have been hampered. That list includes the iShares Emerging Markets High Yield Bond ETF (NYSEArca: EMHY), which had an almost 14% weight to Turkey as of Jan. 27, and the Market Vectors Emerging Markets Local Currency Bond ETF (NYSEArca: EMLC).
EMLC had a 7.3% weight to lira-denominated debt as of the end of 2013. Turkey is also a top-five country weight in the Vanguard Emerging Markets Government Bond ETF (NasdaqGS: VWOB). [Problems for This EM Bond ETF]
iShares MSCI Turkey ETF