Moreover, emerging market bonds are also being supported by the strength of local currencies against the U.S. dollar. Emerging market currencies have appreciated after the bouts of extensive weakness last year. However, that scenario is vulnerable as the U.S. dollar has been a tear recently against other currencies, developed and emerging.
While yields in developed economies remain depressed, with some even trading with negative yields, emerging market bonds have quickly gained traction as one of the few areas left with attractive yields. Bonds issued by developing countries have arguably benefited from the aggressive central bank policies from developed economies that depressed global yields, the Financial Times reports.
For more information on the fixed-income market, visit our bond ETFs category.
PowerShares Emerging Markets Sovereign Debt Portfolio (NYSEArca: PCY)
