Emerging Market Local Debt ETFs Shine

March 23, 2017

iShares Emerging Markets Local Currency Bond ETF (LEMB)

LEMB, with $319 million in assets and 200 holdings, tracks a market-value-weighted index of sovereign bonds. The fund has a 30-day yield of 4.5%. With an expense ratio of 0.50%, LEMB holds South Korea, Brazil and Mexico at the top, together representing about 40% of the portfolio. The South Korean won is up 6.8% year-to-date. The fund is up 6.73% year-to-date.

WisdomTree Emerging Markets Local Debt Fund (ELD)

ELD, with $249 million in assets, is also actively managed, like FEMB. But it costs a lot less, at 0.55% in expense ratio. ELD owns sovereign and corporate bonds issued in more than 10 countries—something that sets it apart in this segment. The fund has a 30-day yield of 5.88%. Russia, Mexico and Brazil are among ELD’s largest country weights. The Russian ruble is up 6% year-to-date. The fund has gained 6.47% so far in 2017.

SPDR Bloomberg Barclays Emerging Markets Local Bond ETF (EBND)

EBND has $124 million in assets and costs 0.40% in expense ratio. The fund tracks a market-value-weighted index of fixed-rate local currency sovereign debt of emerging markets. EBND allocates most heavily to Brazil, South Korea and Mexico, which represent about 35% of the mix, much like competing LEMB. EBND has a 30-day yield of currently 5.14%. The fund is trailing, but not by much, with a 6.13% gain so far this year.

Contact Cinthia Murphy at [email protected]

 

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