Looking ahead, economists anticipate central banks from Turkey to Russia will cut borrowing costs as exchange rates stabilize, especially with the U.S. dollar weakening, which helped alleviate inflationary pressures.
Investors can also gain broad exposure to yield-generating emerging market local currency bonds through ETF offerings. For instance, the iShares Emerging Markets Local Currency Bond ETF (NYSEArca: LEMB) has a 4.26% 30-day SEC yield. Top country weights include South Korea 19.1%, Brazil 12.1%, Mexico 8.6%, Colombi 4.6% and Indonesia 4.6%.
The Market Vectors Emerging Markets Local Currency Bond ETF (NYSEArca: EMLC) has a 5.67% 30-day SEC yield. Its top country exposure include Brazil 9.2%, Poland 9.2%, Mexico 8.7%, Malaysia 8.6% and Indonesia 7.4%.
The actively managed WisdomTree Emerging Markets Local Debt Fund (NYSEArca: ELD) has a 5.78% 30-day SEC yield. The fund’s largest weights include Brazil 11.6%, Mexico 9.9%, Poland 9.8%, Russia 7.2% and Colombia 7.2%.
The SPDR Barclays Emerging Markets Local Bond ETF (NYSEArca: EBND) has a 4.69% 30-day SEC yield. The top country components include South Korea 12.3%, Brazil 10.7%, Mexico 10.0%, Malaysia 8.4% and Thailand 7.3%.
Want more news on Fixed-Income ETFs? Visit www.etftrends.com/Fixed-Income