Emerging Markets Bonds ETF Cheat Sheet

By ETFDatabase | January 17, 2013 AAA

As the U.S. market slowly wanders towards the road to recovery, many investors who had avoided the short term effects of the recession are now left scratching their heads, looking for a long term solution for slow American economic growth without risking everything. One option is to look through emerging market bonds, which often offer growth potentialunparalleledin the U.S., without the risk of emerging equities. The Pro member download from the Emerging Markets Bonds ETFdb Category page can be used to highlight the Emerging Markets Bonds ETFs with the lowest expenses, highest dividend yields, and best historical performance .


Cheapest Emerging Markets Bonds ETFs

Some funds charge as little as 39 basis points while others have expense ratios of up to .65% annually.

Emerging Markets Bonds ETFdb Category
Number of ETFs 14
ER Range 0.39% to 0.65%
Total Assets $14 billion
As of 1/16/13

The cheapest Emerging Markets Bond ETF is the Market Vectors Renminbi Bond ETF (CHLC)at 0.39%, followed by the Chinese Yuan Dim Sum Bond Portfolio (DSUM) at 0.45%.


Commission Free Emerging Markets Bonds ETFs

There are five ETFs in the Emerging Markets Bonds ETFdb Category that are eligible for commission free trading, including:

  • Asia Local Debt Fund (ALD): E*TRADE
  • Emerging Markets Local Debt Fund (ELD):E*TRADE
  • JP Morgan Emerging Markets Bond Fund (EMB): Fidelity
  • Emerging Markets Corporate Bond Fund (EMCB):E*TRADE
  • Emerging Markets Sovereign Debt Portfolio (PCY):TD Ameritrade

Most Heavily Traded Emerging Markets Bonds ETF

On an average day, the ETFs in the Emerging Markets Bonds ETFdb Category trade more than two million shares. The most heavily traded ETF in this category is often between the Emerging Markets Sovereign Debt Portfolio (PCY) and the USD Emerging Markets Bond Fund (EMB); both trade an average of 870,000 shares a day.

Realtime Ratings: Emerging Markets Bonds ETFs
Metric Top ETF Rating
Liquidity Emerging Markets Sovereign Debt Portfolio (PCY) A+
Expenses Market Vectors Renminbi Bond ETF (CHLC) A+
Performance Emerging Markets Sovereign Debt Portfolio (PCY) A+
Volatility Chinese Yuan Dim Sum Bond Portfolio (DSUM) A+
Dividend LatAm Aggregate Bond ETF (BONO) A+
Concentration SPDR Barclays Capital Emerging Markets Local Bond ETF (EBND) A+

Best Performing Emerging Markets Bonds ETFs

The performance of Emerging Markets Bonds ETFs is all over the board, especially during the last year. As of January 10th, the best performing Emerging Markets Bonds ETFs are as follows:

Best Performers
1 Year Emerging Markets Sovereign Debt Portfolio (PCY) +21.62%
3 Years Emerging Markets Sovereign Debt Portfolio (PCY) +44.14%
5 Years Emerging Markets Sovereign Debt Portfolio (PCY) +62.64%
As of 1/10/13

Highest Yielding Emerging Markets Bonds ETFs

Emerging Markets Bonds ETFs aren't generally known for high dividend payouts, but some products in this ETFdb Category have meaningful dividend yields:

  • LatAm Aggregate Bond ETF (BONO): 4.83%
  • Emerging Markets Sovereign Debt Portfolio (PCY): 4.62%
  • SPDR Barclays Captal Emerging Markets Local Bond ETF (EBND): 4.46%

Most Balanced Emerging Markets Bonds ETFs

When comparing potential ETF investments, it is important to evaluate how deep and balanced the underlying portfolios are. Depth refers to how many individual securities comprise an ETF, while balance refers to how top heavy a product iswhat percentage of assets are concentrated in the ten largest individual positions.

  • Deepest Emerging Markets Bonds ETF: The SPDR Barclays Capital Emerging Markets Local Bond ETF (EBND) has approximately 230 individual holdings. TheMarket Vectors Renminbi Bond ETF (CHLC) isthe shallowest ETFs, with only 20 individual holdings.
  • Most Balanced Emerging Markets Bonds ETF: Emerging Markets Corporate Bond (CEMB) has just 12% of its 170 holdings in the top ten positions. At the other end of the spectrum, the Market Vectors Renminbi Bond ETF (CHLC)has over 65% of assets in the top ten stocks.

Disclosure: No positions at time of writing.

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