Fixed Income: Emerging Markets - Sovereign
With 10 ETFs and over $24.38B in combined AUM, the Fixed Income: Emerging Markets - Sovereign segment provides exposure to the Emerging Markets space with a focus on Broad Market securities.
Year-to-date, the best-performing ETF in the segment is the Xtrackers Emerging Markets Bond Interest Rate Hedged ETF (EMIH), with a total return of -0.07%. Meanwhile, the most popular ETF is the iShares JP Morgan USD Emerging Markets Bond ETF (EMB) with $14.20BB in assets under management.
Investors should take a look at the iShares J.P. Morgan EM Local Currency Bond ETF (LEMB). This fund has been chosen as an Analyst Pick by FactSet, thus is the best ETF for the average investor. The iShares J.P. Morgan EM Local Currency Bond ETF ETF tracks a market-value weighted index of sovereign debt denominated in issuers' local currencies, with limits on country exposure. LEMB has an expense ratio of 0.30% and tracks the J.P. Morgan GBI-EM Global Diversified 15% Cap 4.5% Floor Index.
ETF.com Efficiency Insight
The average efficiency score in the Fixed Income: Emerging Markets - Sovereign segment is 79 out of 100, with the iShares JP Morgan USD Emerging Markets Bond ETF(EMB) obtaining the highest rating of 88 out of 100.
Costs dominate the discussion around efficiency. ETFs in the segment have an average expense ratio of 0.44% per year, with the VanEck Vectors J.P. Morgan EM Local Currency Bond ETF (EMLC) having the lowest expense ratio, charging investors 0.30% yearly.
Investors should look for funds with tight tracking, such as the Vanguard Emerging Markets Government Bond ETF (VWOB), with a 12-month median tracking difference of -0.19%.
ETF.com Tradability Insight
The average tradability score in the Fixed Income: Emerging Markets - Sovereign segment is 67 out of 100, with the iShares JP Morgan USD Emerging Markets Bond ETF(EMB) obtaining the highest rating of 85 out of 100.
The iShares JP Morgan USD Emerging Markets Bond ETF (EMB) is the undisputed segment leader when it comes to liquidity. The fund trades 312.72M in daily average volume. Investors should also find ample liquidity in the VanEck Vectors J.P. Morgan EM Local Currency Bond ETF (EMLC), with $61.52M in daily dollar volume.
Use limit orders to trade funds such as the iShares Interest Rate Hedged Emerging Markets Bond ETF(EMBH), due to their double-digit market spreads.
ETF.com Fit Insight
The Bloomberg Barclays EM Local Currency Government Index has been selected as the index that most accurately represents the market in question. The benchmark has been selected by the ETF Analytics team at FactSet, according to a series of guidelines to ensure this index accurately captures its market.
Investors trying to match a broad market exposure should pay attention to . This fund obtains a high Fit score and investors should capture market-like returns.
Other funds diverge from the market, by nature of their investment mandates; for example, follows a strategy and obtains a low Fit score compared with our neutral benchmark.