It seemed like it was just a matter of time until some bargain hunting began in the Latin American debt and equity markets, which was one of many themes yesterday and through the early going in trading today, and we look at several funds in the space where the price action looks like a yo-yo lately.
EMB (iShares J.P. Morgan USD Emerging Markets Bond, Expense Ratio 0.60%) is the largest fund in the greater “Emerging Markets Bonds” space with more than 14% of the fund invested in Latin America via its bond positions in Mexico, Colombia, and Brazil alone, and in spite of price gyrations in the fund via the underlying bonds this week, it was roared back impressively, sinking yield drastically lower than where it was during the worst of the recent Russian/EM turmoil.
With a yield of approximately 4.23% even at these levels, some managers whom are under-allocated to the space may still be inclined to nibble on not only Emerging Markets bond funds, but more specifically those of Latin America which have been exceptionally beaten up recently.
We spoke about EWW (iShares MSCI Mexico, Expense Ratio 0.48%) and its almost impossible to believe consecutive day losing streak, until things turned around on Tuesday, sending the Mexican market substantially higher, and on huge trading volume.
The charts of EWZ (iShares MSCI Brazil, Expense Ratio 0.61%) and GXG (Global X InterBolsa FTSE Colombia 20, Expense Ratio 0.68%) look pretty similar to EWW in the past 72 hours, as the market seems to be breathing a bit easier concerning not only Latin American equities but the Emerging Markets space in general.