A Morningstar Medalist Offering Exposure to Emerging-Markets Bonds
This fund offers broad diversification and boasts a sizable cost advantage over its peers.
IShares JPMorgan USD Emerging Markets Bond ETF (EMB) is a solid choice for low-cost exposure to U.S.-dollar-denominated emerging-markets government bonds. The strategy earns a Morningstar Analyst Rating of Silver because it accurately represents the composition of the market and is one of the cheapest funds in the emerging-markets bond Morningstar Category.
Emerging-markets economies face a lot of idiosyncratic risks, and the bonds issued by their governments and agencies perform more like high-yield corporate issues than U.S. Treasuries. They are more sensitive to credit risk and suffer more severe drawdowns. While in theory this should create an opportunity for actively managed funds to exploit mispricing, the JPMorgan EMBI Global Core Index (the category index), has not been any easy bogy to beat. Historically, investors interested in adding exposure to this area of the bond market would have done well to settle for an index fund. Over the 10 years through June 2020, there was only one fund in the category that outperformed the category index on a risk-adjusted basis.
Neal Kosciulek does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.