“We see relative value as a more important driver of excess returns going forward. We expect emerging market debt returns to hover around coupon as the market gyrates between reflation expectations and slowdown fears. We favor hard currency sovereign, or lower-duration corporate debt, as U.S. dollar strength could revive in either scenario. Investors may want to consider switching from indexing to alpha strategies to allow for a more flexible allocation within emerging market hard and local debt quality segments, and a dynamic duration management to accommodate U.S. curve shifts and dollar strength,” according to a BlackRock note seen in Barron’s.

Related: 14 Hedged Bond ETFs for a Rising Rate Environment

EMB, which turns 10 in December, holds 370 bonds. The ETF has a 30-day SEC of almost 4.5% and an effective duration of nearly seven years. Turkey, Argentina, Russia and Colombia are among the largest issuers in the fund.

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

Tom Lydon’s clients own shares of EMB.