Emerging market bond exchange traded funds are quickly growing in popularity in a low-rate environment as yield-starved investors turn to alternative venues in search of a little extra income.
According to BlackRock data, emerging market bond ETFs attracted some $5.8 billion in net inflows over the third quarter, the largest money influx of any quarter on record, reports Thomas Hale for the Financial Times.
The record inflows follow the previous quarterly record in the second quarter of this year. Year-to-date, emerging market bond ETFs have seen $12.7 billion in inflows, which already outpace the previous annual record of $8.3 billion in 2012.
The ongoing inflows reflect the continued attractiveness of the emerging bond market as many investors look to the prospect of higher yields, strengthening currencies and relatively cheaper valuations to developed market debt.
Furthermore, the emerging debt market is being supported by global fixed-income investors as aggressive monetary policies out of the European Central Bank and Bank of Japan have caused yields on trillions in global Treasuries to fall into the negative.