PCY’s main competitor, the iShares J.P. Morgan USD Emerging Markets Bond ETF (NYSEArca: EMB), uses a more traditional weighting methodology. EMB features no exposure to El Salvador and scant exposure to Panama.
The DB Emerging Market USD Liquid Balanced Index has outperformed the J.P. Morgan EMBI Global Index over the past three years and five years, according to PowerShares data. Year-to-date, PCY has easily outpaced EMB and the Vanguard Emerging Markets Government Bond ETF (NasdaqGM: VWOB).
Last month, Russell Investments published a survey showing institutional investors plan to ratchet up use of smart beta ETFs.
Of institutional investors surveyed by Russell with more than $100 billion in assets, 88% “have evaluated smart beta or plan to do so in the next 18 months; 77% of respondents with assets between $1 billion and $10 billion, and 50% of those with assets under $1 billion responded similarly,” said Russell. [Smart Beta Usage on the Rise]
PowerShares Emerging Markets Sovereign Debt Portfolio
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of EMB.