Emerging Market Bonds Promise Higher Yields, But Are They Worth the Risk?

  • 📰 Investingcom
  • ⏱ Reading Time:
  • 42 sec. here
  • 5 min. at publisher
  • 📊 Quality Score:
  • News: 30%
  • Publisher: 53%

US Dollar Index Futures News

Invesco DB US Dollar Index Bullish Fund,SPDR® Bloomberg International Treasury Bond ETF,Vaneck Emerging Markets High Yield Bond ETF

Bonds Analysis by James Picerno covering: US Dollar Index Futures, Invesco DB US Dollar Index Bullish Fund, SPDR® Bloomberg International Treasury Bond ETF, VanEck Emerging Markets High Yield Bond ETF. Read James Picerno's latest article on Investing.

Foreign fixed-income markets from a US investor perspective have been an unappealing asset class lately – with a glaring exception: corporate bonds in emerging markets. Year to date, this slice of global fixed-income securities is hot, based on a set of ETFs through Thursday’s close . The rest of the field is struggling.

Accordingly, a strategy of hedging out the US dollar exposure has juiced returns further for EM high yield. Meanwhile, the delay in expected rate cuts by the Federal Reserve has been a factor for why central banks in emerging markets have kept rates high. In turn, that’s been a plus for global investors seeking yield.

Currency risk and higher volatility in emerging markets could reduce if not eliminate any premium in these countries’ fixed-income securities for US investors, but for the moment the crowd is overlooking that hazard and bidding up prices that’s left the rest of the bond world far behind.Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors.

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 450. in BUSİNESS

Business Business Latest News, Business Business Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Treasury Market Bets Against Fed as Inflation PersistsBonds Analysis by James Picerno covering: United States 10-Year. Read James Picerno's latest article on Investing.com
Source: Investingcom - 🏆 450. / 53 Read more »

Where’s the Downside Tipping Point for US Stocks?Stocks Analysis by James Picerno covering: S&P 500. Read James Picerno's latest article on Investing.com
Source: Investingcom - 🏆 450. / 53 Read more »