VWOB has an average duration of 6.6 years and a yield to maturity of 4.6%.
Still, there are risks to consider regarding VWOB’s Brazil and Russia exposure. Russia’s central bank has the scope to further raise interest rates as it has three times in the past six months. Traders betting on a decline in Brazilian rates likely need President Dilma Rousseff to lose her reelection bid in October for the dream of lower rates in Latin America’s largest economy to be realized.
VWOB does have some avenues for combatting any further weakness in Russian debt, including its combined 11% weight to Mexico and the Philippines. Speculation has increased the Philippines could earn another credit upgrade, lifting the country further into investment-grade territory while some analysts view Mexican debt as attractive relative to other highly-rated emerging markets issues.
Vanguard Emerging Markets Government Bond ETF
Tom Lydon’s clients own shares of VWOB.