Investors Look to Emerging Market Debt for Income

Emerging market bonds ETFs have recorded billions of pounds of inflows year to date, and their popularity looks set to continue

Karen Kwok 30 March, 2017 | 4:04PM
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Emerging market bonds became an attractive option for income investors in the lower yielding environment of the past seven years. But BlackRock says their popularity will continue even as US interest rates rise.

“When interest rates go higher as we move from unconventional monetary policy to normalisation, the prospect for making positive returns in low yielding assets becomes very complex, which in turn benefits emerging market and high yield bonds,” said Sergio Trigo Paz, head of emerging market debt at BlackRock.

“The Federal Reserve has already increased rates twice in the past few months and they have the option to do two or three more hikes this year, depending on the outlook. The European Central Bank is on track to raise rates too.”

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
iShares JP Morgan $ EM Bond ETF USD Dist111.85 USD0.07Rating
iShares JPMorgan EM Lcl Govt Bd ETF$Dist55.01 USD-0.30Rating
SPDR® Blmbrg Bcly EM Lcl Bd ETF Dis68.99 USD-0.14Rating

About Author

Karen Kwok

Karen Kwok  is a Reporter for

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