In anticipation of the Federal Reserve’s tightening monetary policy ahead, fixed-income investors may look to emerging market debt and high-yield bond exchange traded funds to diversify away from potential risks associated with traditional U.S. government debt exposure.

“If faced with duration or interest rate changes as risk factors, emerging markets and high-yield bonds may present more opportunities than government or investment grade bonds for fixed income investors,” Jan van Eck, CEO of VanEck, said in a note.

For instance, bond investors may look to something like VanEck Vectors Emerging Markets Local Currency Bond ETF (NYSEArca: EMLC), 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) to diversify their fixed-income portfolio with overseas opportunities and potentially higher yield generation.

Van Eck argued that as rates in the U.S. and Europe normalize, emerging market debt may we relatively insulated from the interest rate changes. Some investors, though, may be concerned about currency risk with EM debt exposure, but VanEck remains bearish on the greenback, which should maintain a bullish outlook emerging market assets.

“On the emerging markets equities side, we think there is still room to run as cash flow for emerging markets stocks continues to grow. After several years of underperformance, investors may still be under allocated to emerging markets equities. As the turnaround in this asset class continues, we expect this to change,” Van Eck said.

Van Eck also singles out China, arguing that the emerging country “holds an important role within the world economy. If China experiences a slowdown, virtually every asset class would be affected. ”

ETF investors can also target the emerging market through equity plays like the VanEck Vectors ChinaAMC SME-ChiNext ETF (NYSEArca: PEK) and VanEck Vectors ChinaAMC CSI 300 ETF (NYSEArca: CNXT), which provide exposure to Chinese mainland stocks or A-shares market.

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