Why EM Bonds are Topping Expectations

“Appropriately, additional risk has been priced into struggling markets, such as Turkey (our definition of an emerging market is one whose currency weakens and rates rise in periods of market stress or when the market believes the country has misstepped (e.g. a policy mistake or undesirable political dynamics),” said VanEck.

Some of the developing economies that have recently been most confounded by macro economic woes, such as Argentina and Turkey, are not major parts of EMLC’s roster. Those two counties combine for just over 7% of the ETF’s geographic exposure.

“Emerging markets economies remain both a driver of, and beneficiary of, a benign global growth environment. Many, but not all, continue to benefit directly from higher commodity prices – a trend that has remained in place as emerging markets sold off,” adds VanEck.

EMLC has a 30-day SEC yield of 6.15%.

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