EMBUXEmerging Markets Bond Fund - Class I
By: Eric Fine, Portfolio Manager
The VanEck Emerging Markets Bond Fund commentary includes a review of the EM bond markets over the past month, the investment team’s market outlook, and an update on exposure types and significant fund changes.
Improvements in economic policies, strong balance sheets and improved creditworthiness of local governments continue to foster a strong case for investment in the emerging markets bonds.
Emerging Market Bonds Defined
“Emerging Markets Hard Currency Bonds” are bonds denominated in foreign currencies that are generally widely accepted around the world (such as the US Dollar, Euro or Yen).
“Emerging Markets Local Currency Bonds” are bonds denominated in the local currency of the issuer.
“Emerging Markets Sovereign Bonds” are bonds issued by national governments of emerging countries in order to finance a country's growth.
“Emerging Markets Quasi Sovereign Bonds” are bonds issued by corporations domiciled in emerging countries that are either 100% government owned or whose debts are 100% government guaranteed.
“Emerging Markets Corporate Bonds” are bonds issued by non-government owned corporations that are domiciled in emerging countries.
Long term, an allocation to emerging markets bonds may provide diversification benefits as emerging markets fixed income tends to be less correlated to developed market fixed income.