Looking at EBND for a small position just to get some exposure to non-dollar denominated bonds. Anybody do any investing in emerging market debt? Would like to look at a few more ETFS to compare so interested to see if anyone has any recomendations.
Looking at EBND for a small position just to get some exposure to non-dollar denominated bonds. Anybody do any investing in emerging market debt? Would like to look at a few more ETFS to compare so interested to see if anyone has any recomendations.
I used to look at some emerging market funds (standard mutual funds). I never felt comfortable pulling the trigger. Even though some years the funds did very well.
Post 2009 financial crash, I have not looked at Foriegn or Emerging market funds. I just do not have enough knowledge to feel comfortable.
Emerging market debt may be interesting. I read an article where China is loaning to many emerging countries. However, they are asking for real estate collateral. A port, airport, or things like that. If the loan defaults, China still wins.
What type of collateral do the debt funds obtain?
These are almost entirely sovereign debt not corporate debt so I am not sure how they collateralize them. I need to take a deeper look but was sort of thinking about buying a small portion just in case the dollar heads lower. It will be a small piece if I decide to do it as the drawdown is more equity like than bond like. I'm really just looking at it for asset allocation purposes to diversify away from dollar exposure.Originally Posted by Charles Prestridge
So little transparency, poor regulation in many of these developing or emerging markets. I understand diversification but I always felt I was adding the wrong kind of risk/variability with these markets, that adding this risk would (at best) neutralize any intended benefit.
The credit risk is very big with these. I think the average of the ETF I bought is BB. I sort of weighed the interest rate risk vs the credit risk and I thought the interest rate risk was higher with yields this low. My position is extremely small as I am waiting to put 95% of my bond exposure in A or better rated corporates but I may be waiting until I’m 80 for there to be any meaningful yields
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