EMB - EDF: The Environment For Emerging Market Debt Has Changed
2025-04-25 17:27:19 ET
Summary
- The Virtus Stone Harbor Emerging Markets Income Fund offers a high 14.63% yield, which is higher than the fund's peers.
- The assets in the EDF closed-end fund are negatively influenced by U.S. tariffs and the U.S. dollar's decline, affecting emerging markets' ability to service U.S. dollar-denominated debt.
- The fund's allocation to local currency bonds is advantageous given the U.S. dollar's decline, but it still holds significant U.S. dollar-denominated debt.
- The weakness in the U.S. dollar suggests an international rejection, as current market trends are similar to what is experienced in a currency crisis.
- Despite a high yield, the EDF fund trades at a premium, making it expensive compared to peers, and investors should monitor management's portfolio adjustments.
The Virtus Stone Harbor Emerging Markets Income Fund ( EDF ) is a closed-end fund, or CEF, that seeks to provide its investors with a very high level of income by investing in a portfolio of securities issued by entities in emerging markets. This is one of the more popular income-oriented emerging markets closed-end funds, which may be due to its remarkably high distribution yield. As of the time of writing, the Virtus Stone Harbor Emerging Markets Income Fund boasts a 14.63% yield. As we can see here, that is higher than many of the fund’s peers:
Fund Name |
Morningstar Classification |
Current Yield |
Virtus Stone Harbor Emerging Markets Income Fund |
Fixed Income – Taxable-Emerging Markets Income |
14.63% |
Morgan Stanley Emerging Markets Debt Fund ( MSD ) |
Fixed Income – Taxable-Emerging Markets Income |
11.61% |
Templeton Emerging Markets Income Fund ( TEI ) |
Fixed Income – Taxable-Emerging Markets Income |
10.67% |
Western Asset Emerging Markets Debt Fund ( EMD ) |
Fixed Income – Taxable-Emerging Markets Income |
11.64% |
Morgan Stanley Emerging Markets Domestic Debt ( EDD ) |
Fixed Income – Taxable-Emerging Markets Income |
13.25% |