Last September, I suggested emerging market sovereign debt ETF’s as safe, high yielding investments in which to hide out in case the equity markets swoon again (click here for the link). Well, the stock market hasn’t swooned yet, so let’s see how they performed. The Invesco PowerShares Emerging Market Sovereign Debt ETF (NYSEARCA:PCY), which has 40% of its assets in Latin American bonds and 31% in Asia, rose by a modest 3% before pulling back to unchanged. The two year old fund now boasts $340 million in market cap and pays a handy 6.20% dividend. This beats the daylights out of the one basis point you currently earn for cash, the 3.40% yield on 10 year Treasuries, and still exceeds the 5.38% dividend on the iShares Investment Grade Bond ETN (NYSEARCA:LQD), which buys predominantly single “A” US corporates. The big difference here is that PCY has a much rosier future of credit upgrades to look forward to. It turns out that many emerging markets have little or no debt, because until recently, investors thought their credit quality was too poor. No doubt a history of defaults in Brazil and Argentina in the seventies and eighties is at the back of their minds. With US government bond issuance going through the roof, the shoe is now on the other foot. A price appreciation of 125% over the past year tells you this is not exactly an undiscovered concept. Still, it is something to keep on your “buy on dips” list.