Time to Rethink the Role of Emerging Market Bonds
Emerging markets have done well this year and should continue to attract investor interest around the globe. Latin America is leading year-to-date.
The Barbell strategy involves putting half your portfolio in defensive, low-beta sectors or assets and the other half in aggressive, high-beta sectors or assets.
Emerging market debt can be a great source of income potential in a diversified portfolio, provided you can manage it during a period of extreme volatility.
The VanEck Vectors EM Local Currency Bond ETF (EMLC) could be a good entry point after it took a hit following rising interest rates and volatility in the US dollar.
You have two options when it comes to investing in emerging market bonds—hard currency bonds and local bonds.
Investors are stepping back into emerging market bonds after removing billions of dollars from emerging markets in 2016.
Strong investor interest in emerging market debt has continued despite adverse political and economic issues in some countries.
According to a recent BofA Merrill Lynch Global Investment strategy report, emerging markets are expected to grow at a modest pace of 4.7% in 2017.
Negative bond yields in Japan and low Fed funds rates in the United States and the Eurozone were one reason emerging market bonds performed well in 2016.
Since the US presidential election, emerging markets have bounced back as though the election never happened.
TYG outperformed KYN over the three-year and five-year periods. On the other hand, KYN outperformed TYG over the past year.
The ETRACS Alerian MLP Infrastructure Index ETN (MLPI) and the JPMorgan Chase Alerian MLP Index ETN (AMJ) are two of the largest MLP ETNs.
The Alerian MLP ETF (AMLP) and the First Trust North American Energy Infrastructure Fund (EMLP) are two of the largest MLP ETFs.
Investors looking for opportunities in fallen angel bonds can look at the VanEck Vectors Fallen Angel High Yield Bond ETF (ANGL).
Hungary’s credit upgrades to “investment-grade” (FLTR) opened doors for investors tracking low-risk benchmarks.
In recent years, emerging market (EMLC) (HYEM) ratings have improved considerably due to the strengthening macroeconomic framework as well as years of reforms.
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%…
Strong Local Currency Performance As Rates Remain Steady Returns in the emerging markets debt space have so far in 2016 ranked commensurately with risk. More specifically, local debt has been…
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.