Related: The Case for Emerging Markets Bond ETFs
The Federal Reserve’s refusal to boost interest rates is also helping emerging markets bond ETFs. 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.
“We prefer high yield hard-currency debt, but are cautious on commodity exporters. We like local-currency debt in Brazil, India, Indonesia and Poland for those who can stomach volatility,” adds BlackRock in the note posted by Barron’s.
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iShares J.P. Morgan USD Emerging Markets Bond ETF
Tom Lydon’s clients own shares of EMB.