Thursday, September 9, 2010

EMB -- Emerging Markets Bond ETF



EMB is another key symbol to put on your radar. The chart is currently showing some weakness. Would that be due to the general consolidation in the overall bonds market, or is there something intrinsic to emerging market bonds that is starting to concern investors? It could be something of both, I suppose.

Let's have a look at the performance of EMB relative to U.S. Treasurys. We'll use IEF as our denominator, since the two funds have comparable durations.



You'll notice that this EMB:IEF ratio looks fairly similar to a typical stock market index chart. Much more deterioration in the ratio would be a pretty good clue that the 'risk' trade is back off again.

Here are the top holdings of EMB, by country:

Russian Federation9.19%

Brazil
8.86%

Turkey
7.94%

Mexico
7.91%

Philippines
7.10%

Indonesia
6.25%

Colombia
4.54%

Venezuela, RB
4.51%

Peru
4.12%

Kazakhstan
3.35%