Emerging Markets Bond ETFs: Compelling Income Ideas

Related: 3 Bond ETF Strategies for a Rising Rate Environment

“Emerging markets last year ran their first aggregate annual current account deficit (CAD) for 17 years – and their largest since 1998 (both in US dollars and as a percentage of GDP). The deterioration has been driven mainly by a drop in commodity prices, a narrowing in China’s surplus, and the effect of abundant global liquidity conditions. We forecast the aggregate EM CAD will widen further in 2017 to its highest level in US dollar terms since at least 1990,” according to Fitch Ratings.

The largest country exposures in EMB are Mexico, Indonesia, Turkey and Russia. Over 61% of the ETF’s holdings are rated BBB or BB.

For more information on the fixed-income market, visit our bond ETFs category.

Tom Lydon’s clients own shares of EMB.