Volatility in the developing economies pressured riskier assets at the start of the year, but investment money is slowly trickling back into emerging market debt country-specific exchange traded funds.

Barclays data reveals that foreigners, notably institutional investors, are putting money back into emerging market debt, reports Shuli Ren for Barron’s.

The bottom-up research conducted by Barclays differs from EPFR fund flow data, which shows investors are pulling money out of emerging funds – EPFR mainly tracks retail investors and may not follow emerging market fund managers that started switching putting cash to work.

“When we look at bottom-up high frequency foreign holdings data for Mexico, Hungary, Indonesia, South Africa and Turkey, we get a clearer sign of an improvement,” Barclays analysts Koon Chow and Durukal Gun said in the article. “We estimate that for these five countries (which account for just over 40% of local bond benchmark indices weight), foreign holdings in local bonds rose by USD4.9bn in February, and for the month-to-date in March, their holdings rose an additional USD0.2bn.”

Consequently, the iShares J.P. Morgan USD Emerging Markets Bond ETF (NYSEArca: EMB) gained 3.4% and iShares Emerging Markets Local Currency Bond ETF (NYSEArca: LEMB) increased 3% in February as emerging currencies rebounded from the January sell-off. [It’s Not All Bad in Emerging Market Debt ETFs]

EMB tracks U.S. dollar-denominated emerging market bonds, which helps mitigate currency risks. The ETF has a 5.02% 30-day SEC yield and an effective duration of 6.99 years.