EMB’s oil-related issues extend to South America and well beyond Brazil. The ETF has a 4.3% weight to Colombia, South America’s third-largest oil producer after Venezuela and Brazil. As the United States Oil Fund (NYSEArca: USO) has plunged 51.4% over the past six months, the Global X MSCI Colombia 20 ETF (NYSEArca: GXG) has tumbled 39%.
Speaking of Venezuela, bonds issued by the OPEC represent about 2% of EMB’s weight. Oil accounts for nearly two-thirds of government revenue there and last week, Moody’s slapped a Caa3 rating on the country’s debt, one level above default. Yield’s on Venezuela’s two-year bonds closed 66.7% last Friday, according to Investing.com.
With an effective duration of almost 7.3 years, EMB has a 30-day SEC yield of 5.14%.
iShares J.P. Morgan USD Emerging Markets Bond ETF
Tom Lydon’s clients own shares of EMB, HYG and JNK.