Biggest and Best Emerging Market Bond Funds

Due to the sensitivity of emerging market debt to US Treasury yields, an increasing number of asset management firms have been focusing on short duration bond strategies

Morningstar Manager Analysts 14 January, 2016 | 12:39PM

In light of the interest rate hike in the US and due to the sensitivity of hard currency emerging market debt to US Treasury yields, an increasing number of asset management firms have been focusing on short duration bond strategies. These strategies seek to maintain an attractive level of yield, but limit volatility and sensitivity to movements in US treasury yields. Historically, this approach has been mostly applied to US High Yield corporate credit; however, a new trend seen over the past couple of years is the launch of short duration strategies that focus on emerging market debt.

These funds invest predominantly in the hard currency space – sovereign and corporates – and focus on shorter maturity issues, with the objective of maintaining an attractive level of income, capturing improving emerging market fundamentals through spread compression, maintaining volatility and sensitivity to US treasury yields low. 

The existing line-up of investment strategies and approaches provides investors with plenty of building blocks for gaining exposure to a still interesting and evolving asset class. In the following section, we highlight some of the funds that invest using the strategies.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

  • holly black headshot thumbnail Barnett is Back

    Editor's Views: After a difficult few years, former Neil Woodford protégé Mark Barnett is returni...

  • Stock of the week post-it Stock of the Week: Coca-Cola

    With 1.9 billion servings of Coke enjoyed every day, our Stock of the Week Coca-Cola needs little...

  • Gold bars lined up 3 Anti-Income Investments

    In a topsy turvy investment world, it might be helpful to ditch the growth vs income mindset and ...

  • Income bold text angle Small-Caps for Income?

    Income-seeking investors shouldn't just stick to big blue-chips. There are plenty of dividend-pay...

  • Stacks of coins income week 3 Income Stock Picks

    VIDEO: Where can investors find reliable dividends to meet their income investing needs? Killik &...

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
AXAWF Em Mkts Sh Dur Bds A Cap EUR H112.61 EUR0.36
HSBC GIF GEM Debt Total Return L1C17.14 USD0.00
MFS Meridian Emerging Mkts Dbt A1 USD43.02 USD0.11
Pictet-Global Emerging Debt P USD427.34 USD0.45
Templeton Emerging Mkts Bd A(Qdis)USD9.74 USD0.01

About Author

Morningstar Manager Analysts

Morningstar Manager Analysts  research and rate hundreds of OEICs, unit trusts and investment trusts available for sale in the UK.

Audience Confirmation

By clicking 'accept' I acknowledge that this website uses cookies and other technologies to tailor my experience and understand how I and other visitors use our site. See 'Cookie Consent' for more detail.

  • Other Morningstar Websites
© Copyright 2021 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Cookies       Modern Slavery Statement