Navigating the waters of emerging markets fixed income can be a murky task for investors looking to expand their portfolios into the international markets, but Head of Fixed Income at VanEck, Fran Rodilosso, puts those fears to rest in an interview on Nasdaq’s TradeTalks.
Geopolitical concerns, sheer size in comparison to the United States markets and lack of knowledge in emerging market countries might pose as concerns for the neophyte international investor. Moreover, new international investors might question whether it offers the diversification they are looking for to enhance their current investment portfolios.
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“It’s broad, it’s diversified–you have sovereign debt options, local currency debt options, corporate bonds from a multitude of more than sixty emerging market countries that have bond issues out there for international investors,” said Rodilosso.
Rodilosso also suggested using ETFs to capitalize on their diversification benefits over directly investing in individual emerging markets securities themselves. Moreover, an investor can also corner a specific portion of an emerging market based on regional preferences or a specific asset class.
“You’re able to take advantage of the diversification that exists so you can have a nice, broadly-diversified portfolio,” said Rodilosso. “You can also cut up the market if you will, so you can have local exposure or just corporate or just high-yield corporate.”