IHD has been consistently generating high yields since it started its operations 12 years back. The annual average yield since 2013 has been almost 11.5 percent. IHD focuses on China, India, Taiwan, and South Korea – four economies that have investment-grade sovereign ratings and above-average growth potential. IHD’s portfolio is well-diversified among the different high-growth sectors in emerging markets and carries the usual risks that such a fund will generally have.
EM local currency bonds comprise nearly 60% of the investable emerging markets debt universe and is over 2.5x the size of the U.S. dollar denominated, or “hard currency,” EM sovereign market. The
EM bonds look bullish in the short term as declining UST yields and improving credit risk are both supporting the sector. With a yield of 7.3%, the iShares J.P. Morgan USD Emerging Markets Bond ETF is likely to deliver highly positive real returns. The ETF is also likely to outperform most EM equity funds, with the added benefit of less volatility.
“Wall Street banks are raising their outlook for emerging markets’ hard-currency bonds as a slowdown in U.S. rate hikes could provide some breathing space for the embattled asset class,” a Reuters article said.
“As a truly novel product with a compelling risk/return profile, we believe XEMD is a valuable addition to the marketplace because it enables emerging market exposure while simultaneously addressing creeping
That active strategy is inherent in one exchange traded fund ( ETF ): the American Century Emerging Markets Bond ETF ( AEMB ) . Fixed income investors looking for more yield can give emerging markets (EM) a closer
