Growth in emerging market (EMLC) (HYEM) and developing economies is projected to increase from 4% in 2015—the lowest since the 2008–09 financial crisis—to 4.3% and 4.7%…
Returns in the emerging markets debt space have so far in 2016 ranked commensurately with risk. More specifically, local debt has been the top performer, with a total return of…
As the chart above shows, flows into emerging markets funds remained positive but diminished considerably from July and August.
Strong investor interest in emerging market debt (EMLC) (HYEM) has continued despite adverse political and economic issues in some countries.
Negative bond yields in Japan and the Eurozone, coupled with very low federal funds rates in the United States, are part of why emerging market bonds and currencies have performed so well in 2016.
Emerging market (or EM) debt (EMLC)(HYEM) has, over the last several years, struggled as an asset class.
In the current market environment, duration risk has risen across bond markets (BND) (LQD). When interest rates rise, bonds with a higher duration will likely be affected more.
All countries have suffered from yield increases, and monetary policy is turning less accommodative, even in Japan and the European Union.
The ten-year Treasury note, which rose in price in the first half of 2016 and pushed the yield down to 1.4%, has started selling off in the second half of the year.
Bonds held a lot of promise compared to stocks on September 26, 2016, due to the continuous influx of funds from stocks to bonds.
The Vanguard Total Bond Market ETF (BND) tracks the Barclays US Aggregate Bond Index, which has exposure to the investment-grade universe of the US bond market.
The yield on US ten-year Treasury securities fell below the 1.6% mark for the first time on September 26, 2016 due to a rise in demand.
High-yield bonds gained popularity due to higher yields compared to Treasury bonds, whose yields were being pushed down by the Fed’s interest rate policy.
Emerging markets’ nonfinancial corporate debt breached the $26 trillion mark in the first half of 2016.
The demand for US investment-grade corporate bonds was driven by higher yields generated by bonds in the midst of low interest rates.
IGEM gives you good exposure to investment-grade emerging market bonds. They’re less risky and add diversification benefits to your portfolio.
According to Bloomberg, Treasury Inflation-Protected Securities (or TIPS) have generated a year-to-date return of 6.3% compared to 4.7% by the broad Treasury market.
Since July 2016, VPU has experienced net outflows of nearly $320 million.
In VPU, the top ten holdings form nearly 50% of the total portfolio. These holdings include NextEra Energy (NEE), Duke Energy (DUK), and Southern Company (SO).
In late July, the Utilities Select Sector SPDR ETF (XLU) experienced an outflow of more than $1 billion.