The iShares J.P. Morgan USD Emerging Markets Bond ETF (NASDAQ: EMB), the largest emerging market bond-related ETF, was also among the most popular plays so far this year, bringing in $1.2 billion in net inflows so far in 2019. EMB gained 2.7% year-to-date while the benchmark Bloomberg Barclays US Aggregate Bond Index remained flat.
Developing market assets have strengthened in the new year after plunging over 2018 in response to a number a negative factors, including the escalating U.S.-China trade war, Federal Reserve interest rate hikes, a stronger U.S. dollar and weakening global economic outlook.
However, investors are turning more risk-on amid bets the Fed will pause its tightening monetary policy cycle and on hopes that Washington and Beijing could reach a trade deal soon. Meanwhile, cheaper valuations in what appeared to be an oversold market also contributed to the recovery, with many market observers taking a bullish call on this beleaguered segment of the global market.
For more information on the developing markets, visit our emerging markets category.