Market Vectors Emerging Markets Local Currency Bond ETF (EMLC) has surpassed USD1bn in assets under management.
Fran Rodilosso, one of EMLC’s two portfolio managers, believes emerging markets will remain a compelling story.
“Given current higher interest rates coupled with lower debt, smaller deficits, growing productivity and central bank willingness to act in a vigilant manner, certain emerging markets have currencies that appear to be in a far better fundamental state than their G7 counterparts,” he says.
Ed Lopez, marketing director for Market Vectors ETFs, adds: “We have seen continued interest in emerging market local currency bonds, particularly in light of the third round of quantitative easing (QE3) and its potential negative effects on the US dollar. EMLC has been an excellent and cost-efficient way to quickly add broad exposure to this asset class.”
When EMLC was brought to market in 2010, it was the first US-listed exchange-traded fund designed to provide investors with exposure to an index that tracks a basket of bonds issued in local currencies by emerging market governments.
The fund seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of JP Morgan GBI-EMG Core Index.
As of 31 October, the index tracked a selection of bonds issued in local currencies by 15 emerging market countries: Brazil, Chile, Colombia, Hungary, Indonesia, Malaysia, Mexico, Nigeria, Peru, Philippines, Poland, Russia, South Africa, Thailand and Turkey.