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.
Related: 28 ETFs for Investment-Grade Corporate Bond Exposure
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
