Top Emerging Market Bonds for Diversifying a US-Centric Portfolio

An actively managed fund that focuses exclusively on local-currency government bonds, providing direct exposure to sovereign debt in emerging economies. It offers low-cost access to high-yield government securities, helping investors capture higher interest rates compared to developed market alternatives while maintaining relatively low credit risk.

The largest and most liquid emerging market bond ETF, tracking an index of USD-denominated sovereign bonds from emerging economies. It provides broad diversification across major markets like Brazil, Mexico, and Indonesia, serving as a standard benchmark for investors seeking exposure to hard currency debt without local currency volatility.

This fund invests in USD-denominated bonds issued by sovereign governments and quasi-sovereign entities in emerging markets, with a specific tilt toward local-currency valuation drivers. It offers a unique hybrid profile, combining the credit risk of sovereigns with some sensitivity to local economic performance, distinguishing it from pure hard-currency funds.

A passive ETF that tracks a broad index of local currency sovereign bonds issued in emerging market countries. By investing in bonds priced in local currencies, it provides significant diversification benefits against the US dollar and offers potential capital appreciation alongside yield, though with higher currency volatility.

An actively managed mutual fund that invests primarily in below-investment-grade global corporate bonds, including a substantial portion from emerging markets. Professional managers select high-yield opportunities across borders, aiming to deliver attractive current income while managing credit risk through active security selection and duration management.

While not a single product, this index is the underlying benchmark for many prominent ETFs, representing a diversified basket of hard currency sovereign bonds. Understanding its composition is crucial for investors, as it excludes distressed debt and provides a standardized measure of performance for USD-denominated emerging market sovereign debt.

A global multi-sector bond fund that actively allocates across various bond classes, including a strategic overweight to emerging market debt. The fund leverages PIMCO's macroeconomic research to navigate rate cycles and credit spreads, offering investors a sophisticated approach to capturing yield and diversification without relying solely on geographic exposure.

This ETF tracks an index of high-yield corporate bonds issued by emerging market companies, offering significantly higher yields than government bonds. It provides exposure to the credit risk of developing market corporations, appealing to income-focused investors willing to accept higher volatility and liquidity risks for enhanced returns.

Actively managed to navigate the complexities of local currency debt markets, this fund seeks total return through strategic duration management and credit selection. It allows investors to access a curated selection of local government bonds, potentially benefiting from strong local economic growth and currency appreciation against the dollar.

Note: Often confused with iShares, this ETF offers an alternative low-cost route to emerging market high-yield corporate debt. It tracks a market-cap-weighted index of USD-denominated high-yield bonds, providing broad exposure to the credit profiles of developing nations' corporate sectors with minimal tracking error.

While primarily an equity ETF, its bond counterpart Franklin FTSE EM Corporate Bond ETF offers exposure to corporate debt in emerging markets. This fund provides diversified access to investment-grade corporate bonds, helping investors mitigate sovereign risk while benefiting from the growth potential of emerging market corporations.

Although focused on equities, this fund is often paired with bond holdings to balance a global portfolio. It provides exposure to large-cap growth companies in emerging markets, offering a different risk-return profile that can complement fixed-income assets when seeking long-term capital appreciation alongside diversification.

A global high-yield fund that includes a portion of emerging market corporate debt alongside developed market issuers. This broad approach allows investors to capture high yields across the entire global credit spectrum, reducing country-specific risk while maintaining exposure to the attractive spreads offered by lower-rated borrowers worldwide.

This ETF provides targeted exposure to local currency sovereign bonds in emerging markets, allowing investors to speculate on currency strength and local interest rate trends. It is particularly useful for portfolios seeking to hedge against USD weakness while capturing the higher yields inherent in developing nation government debt.

Part of the BulletShares series, this fund focuses on high-yield corporate bonds maturing in a specific year, including exposure to emerging market issuers. It offers a defined maturity profile, helping investors manage interest rate risk and plan for cash flow needs while accessing the higher yields of the high-yield sector.

An actively managed ETF that seeks to maximize total return by investing in a diversified portfolio of emerging market local currency bonds. The fund managers actively adjust duration and credit exposure based on macroeconomic conditions, offering a professional approach to navigating the volatile but rewarding local debt markets.

This fund provides broad exposure to USD-denominated sovereign bonds from emerging markets, excluding distressed debt. It serves as a core holding for diversified portfolios, offering stability through investment-grade sovereign credit and lower volatility compared to local currency or high-yield alternatives, making it suitable for conservative investors.

Distinct from its USD counterpart, this fund invests in bonds denominated in local currencies, offering potential for significant currency gains if the dollar weakens. It provides a strategic tool for investors aiming to diversify away from USD dependency while capturing the higher interest rates typical of emerging economies.

This ETF tracks an index of corporate bonds issued in emerging markets, offering exposure to the credit risk of developing market companies. It provides a middle ground between sovereign and high-yield debt, offering moderate yields with slightly lower volatility than pure high-yield funds, appealing to balanced portfolio strategies.

An actively managed mutual fund that invests globally in emerging market debt, including both local and hard currency instruments. The fund's flexible mandate allows managers to shift between asset classes and regions based on economic outlook, providing a dynamic approach to capturing yield and managing risk in volatile markets.