Investors who want to tap into developing economies’ credit market have a number of options to choose from. For instance, the actively managed WisdomTree Emerging Markets Corporate Bond Fund (NasdaqGS: EMCB) can help investors add value to their fixed income portfolios.
Given the sell-off in emerging assets this year, Asian developing countries, which are among the biggest issuers of dollar bonds, have seen yields push up to their highest level in almost five years.
According to the Bank for International Settlements, developing countries have issued $2 trillion in outstanding dollar-denominated bonds, tripling the amount issued in the past decade. Still, there could be opportunity with emerging markets credit.
“Emerging market (EM) bonds could serve as an attractive diversifier, offering typically higher levels of yield, comparable credit quality and the ability to partake in the overarching global macro growth story,” said WisdomTree in a recent note. “Given all the optionality within the EM bond universe, we believe that EM corporate bonds, issued in U.S. dollars (USD), can offer an intuitive alternative to EM sovereign bonds.”
EMCB: Exposure to 30+ Countries
EMCB is over six years old and has an effective duration of 4.45 years. The average years to maturity on the fund’s holdings is 9.53 years.