ETF Research and Analysis

by Patricia Oey
WisdomTree Emerging Markets Local Debt is suitable for use as a satellite holding within a diversified fixed-income allocation. This quasi-actively managed fund is comprised of local-currency-denominated debt issued by   Read more 

Bull Case

With low correlations to other major asset classes, emerging-markets debt can offer diversification benefits.
Relatively higher growth rates and low debt levels in the emerging world make defaults less likely.
Local-currency emerging-markets bonds provide an opportunity to benefit from relative currency gains, which may materialize over the long term thanks to emerging markets' fiscal stability and higher economic growth. Read more 

Bear Case

During the past few years, spreads have narrowed. Going forward, returns in this asset class may be more subdued.
Thanks to strong recent foreign portfolio inflows, emerging-markets debt is now more susceptible to changes in global risk appetite.
While credit quality has been improving over the past several years, emerging markets still court unique risks related to lower transparency, weaker governance, and less liquidity. Read more 

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