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VWOB: Strong Emerging Market Debt Index ETF, 4.1% Yield


  • Yields are down for most asset classes.
  • Emerging market debt is the only exception.
  • VWOB is an emerging market debt index ETF and offers investors a good, historically above-average 4.1% yield.
  • This idea was discussed in more depth with members of my private investing community, CEF/ETF Income Laboratory. Learn More »

BRICS economy and policies concept : Flags of BRICS or group of five major emerging national economy i.e Brazil, Russia, India, China, South Africa. BRICS members are all leading developing countries.
Photo by William_Potter/iStock via Getty Images

According to the J.P. Morgan, USD-denominated emerging market debt is the only major asset class trading with an above-average yield. The Vanguard Emerging Markets Government Bond ETF (NASDAQ:VWOB) is an index ETF of

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This article was written by

Juan de la Hoz profile picture

Juan de la Hoz has worked as a fixed income trader, financial analyst, operations analyst, and as an economics professor. He has experience analyzing, trading, and negotiating fixed-income securities, including bonds, money markets, and interbank trade financing, across markets and currencies. He focuses on dividend, bond, and income funds, with a strong focus on ETFs.

Juan is a contributor to the investing group CEF/ETF Income Laboratory which is led by Stanford Chemist. Features of the service include: managed income portfolios (targeting safe and reliable ~8% yields) making use of high-yield opportunities in the CEF and ETF fund space. These are geared toward both active and passive investors of all experience levels. The vast majority of CEF/ETF Income Laboratory holdings are also monthly-payers, for faster compounding and steady income streams. Other features include 24/7 chat, and trade alerts. Learn More.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (21)

I like TEI a Templeton CEF in the emerging market debt space. Long term performance looks horrible but in the short term its yielding 11.78% with a 10.32% discount and right now it looks cheap. I like the sponsor, the holdings and the 45% institutional ownership. It's only up about 10% from the low of 3/20 so downside should be very limited if we get another steep sell off.
@du4sloop Below $7.5 .
My entry @$7.57 will average in small amounts to 2.5 -3% position.
Juan de la Hoz profile picture
@du4sloop, thanks for commenting! Always glad to hear your thoughts.
Most EM countries are heavily dependent on foreign investment and China, two wild cards!
Juan de la Hoz profile picture
@Bobbie B, yeah these investments are not without risk!
Ventureshadow profile picture
Do you know of a similar ETF that does not invest in extremely risky countries such as Argentina and Turkey? If it weren't for those two among the top ten I'd be interested in VWOB.
I have a modest position in it.

Like everything other asset in today's world it's not attractively valued & comes with a fair amount of risk.
Any thoughts on HYEM ?
Ventureshadow profile picture
@fiame kupa Thanks for mentioning it. In the absence of author response I observe that HYEM Is less volatile than VWOB and has a higher yield and greater return over 5 years and 10 years than VWOB. However 18% of HYEM's holdings are in Turkey and Argentina vs 11% of VWOB's holdings. I consider 11% too high for me, and 18% repellent.
IHD might appeal to you. No leverage, a 9% yield and 57% institutional ownership. No Argentina and only .33% in Turkey. Price has fully recovered from 3/20 which might be viewed as a positive and longer term performance hasn't been awful.
Ventureshadow profile picture
@du4sloop Thanks for your suggestion. IHD is a fund of stocks not of debt, so a different animal.
I took a small position in VWOB in January. Down slightly since then, but I'm hoping it will do well as the world economy improves.
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