With recent talks of a Federal Reserve rate hike and bond yields ticking higher, some are concerned of another taper-tantrum event that could pressure developing market debt. Nevertheless, emerging market bond exchange traded funds may still find support as one of the few areas that investors can generate decent yields.

“The search for yield is not ending anytime soon,” William Sokol, Product Manager of ETFs at VanEck, told ETF trends in a call.

Sokol pointed out that despite the recent increase in bond yields, or decline in bond prices, the market is still stable and reflects normalized growth. Moreover, fundamentals in the emerging economies continue to strengthen with increased expected growth, stabilizing commodities market and narrowing deficits.

Consequently, investors may still find value and generate attractive yields through emerging market debt, even with the pending Federal Open Market Committee meeting and increased likelihood of a rate hike sometime this year.

“The ongoing search for yield continues to bring investors into emerging markets debt. Our view is that a rate hike by the Federal Reserve (the Fed) is not likely to dampen this trend, and that the environment for emerging markets debt will remain supportive,” Fran Rodilosso, a VanEck portfolio manager, said in a note.

SEE MORE: It’s Easy to Explain Investors’ Affinity for EM Bond ETFs

Morgan Stanley also mirrors this sentiment.

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