Expect More Growth for Emerging Markets Bond ETFs

Emerging market fundamentals, like growth, debt stock, real rates and policy flexibility, all remain at a favorable starting point relative to developed economies going forward.

“There are other reasons why we believe that ETFs are particularly well suited for emerging markets debt investors,” according to VanEck. “Emerging markets debt has gained greater acceptance over the past decade as a standalone asset class, separate from a global bond allocation, among asset allocators. For this group of investors, ETFs provide low cost, transparent, and liquid beta exposure. Although ETFs are increasingly being used as part of a strategic asset allocation, perhaps as a complement to actively managed strategies, they are also used tactically by investors.”

Furthermore, bond investors may customize their credit risk exposure to emerging market debt through speculative high-yield options or more conservative investment-grade exposure, including the VanEck Vectors Emerging Markets High Yield Bond ETF (NYSEArca: HYEM), VanEck Vectors EM Investment Grade + BB Rated USD Sovereign Bond ETF (NYSEArca: IGEM) and VanEck Vectors Emerging Markets Aggregate Bond ETF (NYSEArca: EMAG).

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