Exchange traded fund sponsor and asset manager WisdomTree has launched the WisdomTree Emerging Markets Corporate Bond Fund (EMCB).
EMCB provides broad-based exposure to corporate bonds of emerging market issuers across Asia, Latin America, Eastern Europe, Africa and the Middle East. EMCB is listed on the NASDAQ Stock Market with an expense ratio of 0.60%.
"WisdomTree is pleased to offer the first Corporate Bond ETF that offers access to a rapidly growing asset class, the debt of a broad array of quality corporate issuers in the emerging markets. These bonds are supported by the same favourable growth rates, attractive demographics, and improving fundamentals which have driven strong relative returns in emerging market assets in general," says Bruce Lavine (pictured), President & COO, WisdomTree. "We are equally pleased to tap the expertise of Western Asset Management Company, one of the world’s leading fixed income managers, as sub-advisor to the Fund.”
Western Asset is a subsidiary of Legg Mason.
Investment grade Emerging Market corporate bonds have historically offered a significant yield premium compared to similarly rated U.S. corporate securities. EMCB will seek to maintain at least 65% of its holdings in investment grade assets with intermediate-term duration between two and 10 years.
Commenting on the strategy, Matthew Duda, EMCB Portfolio Manager of Western Asset, says: "While the investment process begins with an assessment of the macro and country-specific risks, company-specific factors may drive emerging market corporate bond returns to a larger extent than country-level issues as sovereign risk trends lower in this asset class over time. We therefore combine top-down macroeconomic analysis with bottoms-up fundamental analysis of the industries and corporations essential to the ongoing industrialization and development of the emerging world."