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Fund Spy: Morningstar Medalist Edition

Plunging Currencies Drive a Wedge in Emerging-Markets Bond Funds

Third-quarter sell-off causes a wide dispersion of returns between local- and hard-currency-focused funds.

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Emerging-markets bonds have recovered a bit so far in October, but the third quarter was a painful reminder of the risks of emerging-markets currency.

The first table below shows recent and long-term returns through September 2015 for JPM EMBI Global Diversified, or JPM EMBI, which tracks hard-currency bonds (those denominated in U.S. dollars). The JPM CEMBI Diversified, or JPM CEMBI, comprises emerging-markets corporate bonds denominated in U.S. dollars, and the JPM GBI-EM Global Diversified, or JPM GBI-EM, tracks local-currency-denominated debt. 

Karin Anderson does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.