PowerShares Emerging Markets Sov Dbt ETF

While local currency has better advantages to hard currency corporate and sovereign, a blended approach could provide optimal returns.

A few key themes have emerged in 2018 which are divergent in some ways and could be an indication of what’s to come over the next 12 to 18 months.

Real yields in emerging markets (or EM) have remained at compelling levels over the past few years.

The November Conference Board LEI reported the average consumer expectations for business conditions for October at 0.96, a sharp increase from the September reading of 0.43.

Consumer expectations for business conditions Consumer expectations data, which forms the only non-leading component of the Conference Board Leading Economic Index (or LEI), is collected through two different surveys. One of these surveys is conducted by the University of Michigan and Reuters, where consumer expectations for economic conditions in the next 12 months are collected, […]

Consumer expectations for business conditions Consumer expectations form the only component of the Conference Board Leading Economic Index (or LEI) based on business expectations. Referring to consumer expectations regarding future economic conditions, their measurement is an average of two surveys. One survey, conducted by the Conference Board, records consumer expectations for business conditions six months […]

VanEck A Diverse and Growing Category The emerging markets high yield bond market has grown tremendously over the past 10 years, from $56 billion at the end of 2007 to $440 billion as of June 30, 2017.[2. Source: BofA Merrill Lynch.] In addition to growing in size, diversity within the category has also increased. Investors currently […]

VanEck Higher Yield and Lower Duration Compared to U.S. high yield bonds, emerging markets high yield bonds offered a 90 bps yield pickup as of June 30, 2017.[1.U.S. high yield bonds and emerging markets high yield bonds are represented by BofA Merrill Lynch US High Yield Index and BofA Merrill Lynch Diversified HY US Emerging […]

The yuan remains a focus of attention of the international community and a key risk for China’s macroeconomic stability in recent years.

Government bond yields in China are higher than its Asian counterparts such as South Korea and Singapore and much higher than major developed markets.

With the onset of reforms, foreign holdings in China’s onshore bond (EMB) (PCY) market is gradually increasing.

Many leading bond index providers are still not including China’s onshore bonds in their benchmark indexes due to various regulatory and operational concerns.

In the third and final phase of bond (EMB) reforms that began after 2015, the substantial activities of the market were open to global investors.

The opening of China’s onshore bond market (EMB) (PCY) was a gradual process that included a number of cautious measures.

In March 2017, Citi’s fixed income indexes decided to include onshore Chinese bonds (EMB) (PCY) in its three government bond indexes.

China’s onshore bond market (EMB), consisting of locally denominated and issued bonds, is larger than the offshore bond market.

Emerging markets are becoming increasing important in the global economy, as they account for about 75% of global output and consumption.

Investors are stepping back into emerging market bonds after removing billions of dollars from emerging markets in 2016.

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.

In the emerging market bond space (PCY) (EMLC), high-yield bonds and local currency bonds outperformed hard currency sovereign bonds.

Trump’s unexpected presidential victory caused short-term uncertainty about markets and policies. His win reinforced a reflationary theme in global markets.

Emerging market (or EM) bonds (PCY) offer diversified exposure with higher yields compared to their developed market equivalents (IHY).

In today’s context, emerging market bonds (IGEM) look like good opportunities for investors.

Emerging markets’ nonfinancial corporate debt breached the $26 trillion mark in the first half of 2016.

The Federal Reserve kept its key interest rate unchanged in its policy meeting this week while signaling a possible rate hike in December.

While around 30% of developed market bonds (IHY) are trading at negative yields, emerging market debts (HYEM) are offering attractive returns.

Strong investor interest in emerging market debt (EMLC) (HYEM) has continued despite adverse political and economic issues in some countries.

In the wake of disappointing economic indicators over the past month, the Federal Reserve kept the interest rate unchanged in its policy meeting this week.

As the intensifying search for yield goes international, Matt examines and shares his thoughts on the different Asian bond markets.

Emerging market bonds have been doing extremely well over the past couple of months. EM debt funds have been in the green for seven consecutive weeks.

Emerging market debt (EMB) offers plenty of opportunities to investors. Markets are expected to continue their outperformance for the next few quarters.

In the long term, Eastern Europe is largely affected by the United Kingdom’s exit from the European Union because of its strong trade links.

By early July, some $11.5 trillion in bonds were trading at negative rates, with 58% of the Barclays US Aggregate Bond Index1 trading below 1%.

Global emerging markets (“EM”) debt, both hard and local currency, rebounded strongly in June after a significant retracement in May.

PCY is a smart beta fixed income security fund. It tracks the investment results of the DB Emerging Market USD Liquid Balanced Index.

Sovereign borrowers in emerging markets are typically lower-rated compared to U.S. Treasuries. As a result, they provide higher yields. U.S. Treasuries (TLT) are considered to be some of the safest assets in the world.

A stable political regime is one of the most important factors that determines sovereign risk. The ability to institute fiscal reforms through the legislative framework is also important to access international debt markets. Credit markets would look more favorably on such borrowers.

Most bond investments are subject to credit risk and interest rate risk. Credit risk is the risk of the borrower defaulting on the amount borrowed. Interest rate risk implies changes in the value of bond prices due to changes in interest rates. Bond prices move opposite to interest rates.

Sovereign bonds may be issued by governments of developed market (EFA), emerging market (EEM), and frontier market economies. Countries are classified as developed, emerging, or frontier markets depending on their stage of economic and financial sector development.

Indicators of foreign economic activity suggested continued expansion, though at a rate lower than in the previous quarter. The deceleration was concentrated in emerging market economies.

In this article, we’ll discuss some of the risks an investor must consider before investing in international bonds. Some of these risks are unique to this asset class.

This part compares the performance of domestic bond funds investing in the U.S. Treasury securities with international bond funds, which invest in sovereign bonds issued by foreign governments.

Emerging market (or EM) international bond funds invest in bonds whose issuers are based in countries whose economies aren’t as advanced as those in developed markets.

There are various measures used to compute the yields on bond funds, the most commonly used ones being the SEC yield and the distribution yield.

International bond funds are funds that invest in debt issued overseas, either by foreign governments or corporates or both. These funds invest either in local currencies or U.S. dollar–denominated debt securities.

High yield bond flows last week posted the straight sixth week of positive inflows, though the pace was lower than the previous week.

High yield ETNs are favored in the market as much as high yield ETFs.