A Cautious Take on a Hot ETF Asset Class: Emerging Markets

Enticing greater investment dollars, economic fundamentals and idiosyncratic risks in the emerging markets are improving, such as rising oil and commodity prices that are supporting major emerging economies, like Brazil and Russia. Additionally, concerns over China downturn, which drove bearish positions last year, have diminished.

Related: 3 Bond ETFs Hinting at Emerging Markets Upside

According to BlackRock, emerging market governments have accumulated less dollar debt, built up foreign reserves and adopted flexible exchange rates to obviate mistakes during the 1980s and 1990s crises. Though the current outlook for emerging markets debt is far from sanguine, some analysts see opportunity in the asset class.

“In the note Friday, Bank of America Merrill Lynch said the emerging-market trade has not yet sent a message for a sell signal, noting the bank would need to see “huge” $10 billion inflows this week to trigger such a call,” reports CNBC.

For more information on the fixed-income market, visit our bond ETFs category.

iShares J.P. Morgan USD Emerging Markets Bond ETF