EMHY Outperforms, But The Risk Premium Of HY Over EM Is Decreasing
iShares J.P. Morgan EM High Yield Bond ETF is a high-yield ETF, only sovereign + corporate, which over the last years has shown a certain outperformance compared to traditional EM and global HY. All this while maintaining relatively contained volatility, which has attracted the attention of many analysts and investors. What pushed the demand for EMHY higher was a favorable economic and monetary context, which pushed the risk premium to period lows.
EMHY: Emerging Markets Junk Bond ETF With Little Appeal
The iShares J.P. Morgan EM High Yield Bond ETF offers high yield and broad geographic diversification, focusing on sovereign debt and BB-rated junk bonds. EMHY outperforms other emerging market high-yield ETFs, but lags the U.S. high-yield benchmark HYG since inception. The fund has suffered significant erosion in share price and income, especially after adjusting for inflation, raising concerns for long-term investors.
EMHY: Structurally Sound In Terms Of Exposure
High-yielding emerging market bonds may seem doomed amid rising global economic tensions, and the beta effect that could have. Despite global-level and credit cycle concerns, the iShares J.P. Morgan EM High Yield Bond ETF seems promising given its structure and yield. Structurally, the vehicle is exposed to EMs with improving economies and debt repayment abilities. Moreover, its top constituents have manageable interest repayment abilities.
EMHY: Beats Its Peers, But Not A Good Long-Term Investment
iShares J.P. Morgan EM High Yield Bond ETF offers high yield and geographic diversification, focusing on top-tier junk bonds in emerging markets. Based on performance since 2021, EMHY is one of the best, if not the best, emerging markets high yield bond ETFs. Nonetheless, I think long-term investors should avoid EMHY due to steady price decay and inflation impacts on income.
EMHY: A Solid Way To Access Emerging Market Bonds
Bonds are increasingly attractive, especially in emerging markets, with the iShares J.P. Morgan EM High Yield Bond ETF offering high yields and diversification. EMHY focuses on high-yield sovereign and corporate bonds from emerging markets, reducing currency risk for U.S. investors and offering a 7.08% SEC yield. The fund's diverse portfolio includes 664 bonds, with significant exposure to sovereign debt, industrial sectors, and various emerging economies like Turkey and Brazil.
