Bond ETF Investors Should Take a Second Look at Battered EM Debt

While many are still wary of the current international environment, especially with increasing trade disputes, the strength in the U.S. dollar and rising interest rates are a bigger headwind. Nevertheless, BlackRock argued that potential investors should look to USD-denominated EM debt to diminish risks.

“In fixed income we prefer selected hard-currency EM debt. It provides some insulation against currency declines and looks relatively cheap versus local-currency debt,” according to a recent BlackRock note.

Along with EMB, fixed-income investors can look to options like the Invesco Emerging Markets Sovereign Debt Portfolio (NYSEArca: PCY) and JPMorgan USD Emerging Markets Sovereign Bond ETF (NYSEArcaL: JPMB) to gain exposure to dollar-denominated emerging market debt.

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