EMB - EMB: A Lot Of Good News Priced In To Emerging Market Bonds
2024-06-09 14:10:27 ET
Summary
- The iShares J.P. Morgan USD Emerging Markets Bond ETF provides exposure to U.S. dollar-denominated bonds issued by emerging market countries.
- EMB offers extreme diversification with exposure to over 50 sovereign entities and over 600 bonds, with a portfolio yield to maturity generally above 7%.
- EMB has underperformed some actively managed EM bond funds, and investors should question whether passive makes sense for this asset class.
EMB Overview
The iShares J.P. Morgan USD Emerging Markets Bond ETF ( NASDAQ:EMB ) is designed to give exposure to U.S. dollar-denominated bonds issued by emerging market countries. Investors based in the US tend to prefer the exposure in USD to reduce currency risk.
From the emerging market countries’ perspective, they see this as an opportunity to tap into such demand and will therefore base a lot of their issuance in U.S. dollar-denominated debt. These two factors contribute to this ETF being substantial in size, with net assets of above $14 billion according to the EMB website ....
EMB: A Lot Of Good News Priced In To Emerging Market Bonds