Dollar Pimp

4 Ways to Protect Your Capital (Think Debt and Bond ETFs)

I think Pimco offers an EM bond mutual fund denominated in EM currencies - Emerging Market Local Bond?


On Oct 01 10:36 PM Bob Mayo wrote:

> Ugg. PCY and EMB are in dollars. GIM and TIE are more than two thirds
> in dollars or euros. CEW is the only thing I can find denominated
> in a variety of emerging market currencies, but it is a currency
> fund not a bond fund.
>
> Templeton and Merk also have hard currency funds, but with >1% expenses.
>
>
> Anybody have suggestions for emerging market bond funds in local
> currency?

4 Ways to Protect Your Capital (Think Debt and Bond ETFs)

It's true you need to be careful with emerging market bond funds since most EM bonds are denominated in dollars. Sometimes it takes a bit of digging to find out exactly what your currency exposure is. For instance GIM, which is also mentioned here, is about 40% exposed to the dollar, which makes it more dollar neutral than a bearish dollar play. I like the FEO closed end fund; it's 50% exposed to the dollar (again dollar neutral) and invests in both EM bonds and stocks.


On Oct 01 03:56 PM market mojo wrote:

> Regarding PCY. Here is part of its profile from Yahoo.
>
> "The fund normally invests at least 80% of total assets in emerging
> markets U.S. dollar-denominated government bonds."
>
> Doesn't this mean that the fund is 80% dollar correlated? If so it
> doesn't seem to be a good fund for dollar diversification.