Emerging Markets Corporates Are Upside Outlier For Global Bonds
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 (May 9). The rest of the field is struggling.
High-yield bonds issued by companies in emerging markets are especially strong this year. VanEck Emerging Markets High Yield Bond ETF (HYEM) is posting a strong 5.1% rise so far in 2024. A distant second-place performer: WisdomTree Emerging Markets Corporate Bond Fund (EMCB), a (primarily) investment-grade holder of EM corporates that’s up 2.2%.
Otherwise, foreign bonds are in the red this year, led by a 5.2% loss for intermediate government bonds via developed markets ex-US (BWX). A US-dollar hedged global bonds ex-US benchmark (BNDX) is also underwater in 2024, echoing the loss for US bonds as well (BND).