Emerging Market Bond Fund

 

 

 

Information on Emerging Market Bond Index

 

J.P.Morgan Emerging Market Bond Index Global - Known as EMBI Global, tracks the return of external debt instruments that trade in the emerging markets. The JPMorgan Emerging Markets Bond Index has had returns that have been greater than all other debt and bond markets over the last 15 years. Emerging market debt has also outpaced the S&P 500 Index since early 1993, and it has also returned more than most other stock markets. As an example, from 1994 through June 2004, this emerging market bond index returned an outstanding 248%. Compare that to total returns of about 101% for the U.S. corporate junk bond market and investment-grade bonds. The bond index returned more than the S&P500 as well, which gained 193% over this time frame.

 

Markit iBoxx Global Emerging Markets Bond Index (GEMX) - This emerging market bond index was just launched in April 2008. It now includes 20 emerging markets. An additional 14 emerging countries are to be included over the next year.

Inclusion in this index is based on market size and a set of criteria that assess the investment climate for the merging country. d

 

Another bond index to consider is from Citigroup. While it does not focus on emerging market bonds, it will give you exposure to oversees debt.

Citigroup World Government Bond ex-U.S. Index : The Citigroup World Government Bond ex-U.S. Index tracks the bond markets of the following countries. Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. This bond index is a market capitalization weighted index. For a country to be eligilbe, it must meet certain economic criteria. Bond maturity will be at least one year.

 

Additional emerging market bond indexes will surely be developed. There are two emerging market bond ETFs, one from iShares and another from Invesco Powershares, that you can invest in to gain exposure to this asset class.

 

 

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