EMB, the largest and most liquid emerging market bond ETF, tracks the J.P. Morgan EMBI Global Core Index, a market-cap-weighted index. Potential investors should note that since it is a cap-weighted index, countries with greater debt will have a larger position in the portfolio.
Alternative to EMB’s cap-weighted indexing methodology, PCY tracks the DB Emerging Market USD Liquid Balanced Index, which equally weights bonds so that each country has an equal weighting.
With the dollar weakening and emerging currencies rebounding, investors may also take a look at local currency-denominated ETFs, or emerging market bond ETFs that are issued in their local currencies, including the VanEck Vectors Emerging Markets Local Currency Bond ETF (NYSEArca: EMLC) and actively managed WisdomTree Emerging Markets Local Debt Fund (NYSEArca: ELD).
ELD is an actively managed ETF.
iShares J.P. Morgan USD Emerging Markets Bond ETF