“In a low-yield environment, emerging markets bonds are an attractive way to diversify and generate higher income,” Matt Reiner recently mentioned in Financial Adviser, a blog by Dow Jones.
For emerging bond ETFs, currency is key. As noted in the recent Financial Adviser article, concerns about Europe’s sovereign debt crisis aren’t keeping portfolio managers and financial advisers from heading deeper into emerging markets bond exchange-traded funds.
In 2011, it was estimated that about $15.8 billion in net new money flowed into Emerging Market Bonds through mutual funds and ETFs. And, according the market research company XTF Global, investors have already poured a net of $1.9 billion to date for 2012.
At Capital Investment Advisors, Reiner has been favoring the WisdomTree Emerging Markets Local Debt Fund (ELD). A very popular ETF dealing in local currencies.
Emerging Market ETFs are continuing to grow in popularity to investors, but there are other funds that will give investors the flexibility to slice and dice emerging markets by region and country.
Starting a portfolio with ETFs in these markets can be risky and inexperienced investors should seek the counsel of an experienced financial adviser.