Factors like U.S. rates, growth and inflation, EU and Japanese monetary policies could all potentially weigh in the emerging market outlook. While emerging markets bonds can be a tricky asset class to navigate, data suggest passive management works.
“EMB has outperformed more than half of the active mutual funds over longer time frames. EMB is a market capitalization-weighted index fund. In this illiquid, high-transaction-cost market, fewer than half of the active mutual funds in the U.S. have been able to beat EMB since its inception nine-plus years ago,” according to BlackRock.
EMB has an effective duration of just under seven years and a 30-day SEC yield of 4.6%. None of the ETF’s geographic weights account for more than 6.2% of EMB’s roster. The top four country holdings are Mexico, Indonesia, Turkey and Russia. EMB’s holdings have a weighted average maturity of 10.75 years, according to issuer data.
For more information on the fixed-income market, visit our bond ETFs category.
Tom Lydon’s clients own shares of EMB.