“Investors are making the shift as emerging-market assets show signs of life. After three years in the doldrums, dollar-denominated bonds have gained about 8 percent this year as oil prices climb, China’s growth stabilizes and the greenback loses some of its momentum,” reports Bloomberg.
Previous Fed rate hikes have triggered volatility in the emerging markets. While many emerging markets have garnered a bad reputation for experiencing spiraling debt defaults in face of rapid currency depreciation, the developing economies are more resilient in a weak commodities environment.
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iShares J.P. Morgan USD Emerging Markets Bond ETF
Tom Lydon’s clients own shares of EMB.