While the risk-off trade pulled on the equity markets, emerging market bond-related ETFs were surprisingly eking out a positive return after underperforming for most of the year.

Over the past week, the WisdomTree Emerging Markets Corporate Bond Fund (NasdaqGS: EMCB) gained 1.4%, WisdomTree Emerging Markets Local Debt Fund (NYSEArca: ELD) rose 0.9%, SPDR Bloomberg Barclays Emerging Markets Local Bond ETF (NYSEArca: EBND) advanced 0.6% and iShares Emerging Markets Local Currency Bond ETF (NYSEArca: LEMB) increased 0.6%.

“Some confidence in EM has been restored following strong policy responses in both Argentina and Turkey, and a lighter political calendar ahead,” Marcelo Assalin, head of emerging markets debt at NN Investment Partners BV in The Hague, said, according to Bloomberg. “The majority of EM countries are in relatively healthy economic shape in both external and domestic terms.”

According to a recent survey of investors, traders and strategists, respondents held a favorable view of emerging market Latin America, Asia and EMEA debt, with a notably favorable outlook for Mexico’s markets.

Investor optimism over the new trade accord that will replace the North American Free Trade Agreement and a market-friendly stance from President-elect Andres Manuel Lopez Obrador have been supporting Mexico’s outlook.

Emerging Market Debt Picks

Among the top market picks, bond investors favored Mexico, Indonesia, Russia, China and South Africa emerging market debt.

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