Emerging currencies have strengthened on improving commodity prices, notably the rebound in crude oil prices, as many developing economies are major exporters of raw materials.
Consequently, more investors are looking to emerging market yields, despite the risks associated with the developing economies.
“People do want to take much more risk, more corporate, more high-yield, especially EM,” Paul McNamara, investment director at GAM, told FT, adding that one of the issues holding back risk-taking was the Fed’s September meeting.
Investors interested in emerging market bond exposure may consider a number of U.S. dollar-denominated EM debt ETFs, such as the iShares J.P. Morgan USD Emerging Markets Bond ETF (NYSEArca: EMB). EMB has a 7.18 year duration and a 4.45% 30-day SEC yield.
The PowerShares Emerging Markets Sovereign Debt Portfolio (NYSEArca: PCY) has a 8.97 year duration and a 4.75% 30-day SEC yield.
The VanEck Vectors Emerging Markets Aggregate Bond ETF (NYSEArca: EMAG) has a 4.65 year duration and a 3.94% 30-day SEC yield.
The Vanguard Emerging Markets Government Bond ETF (NasdaqGM: VWOB) has a 6.6 year duration and a 4.13% 30-day SEC yield.
For more information on the fixed-income market, visit our bond ETFs category.