VWOB: A Great Emerging Market Bond Fund

seekingalpha07-19

Bonds have been volatile, but emerging market sovereign debt may be a suitable option in a weak dollar environment.Vanguard Emerging Markets Government Bond Index Fund ETF Shares offers exposure to ...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nVWOB: A Great Emerging Market Bond Fund\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-07-19 03:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4704930-vwob-a-great-emerging-market-bond-fund><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Bonds have been volatile, but emerging market sovereign debt may be a suitable option in a weak dollar environment.Vanguard Emerging Markets Government Bond Index Fund ETF Shares offers exposure to ...</p>\n\n<a href=\"https://seekingalpha.com/article/4704930-vwob-a-great-emerging-market-bond-fund\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4550","symbol_name":"红杉资本持仓","start_time":0,"source_url":"https://seekingalpha.com/article/4704930-vwob-a-great-emerging-market-bond-fund","article_id":"2452369456","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/155095389/image_155095389.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2452369456","pubTimestamp":1721331037,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Bonds have been volatile, but emerging market sovereign debt may be a suitable option in a weak dollar environment.Vanguard Emerging Markets Government Bond Index Fund ETF Shares offers exposure to em","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4550":"红杉资本持仓","EMB":"新兴市场美元债ETF-iShares","BK4585":"ETF&股票定投概念","VWOB":"新兴市场美元国债ETF-Vanguard","FDN":"First Trust Dow Jones Internet I","BK4588":"碎股"},"translate_title":"VWOB：伟大的新兴市场债券基金","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"US3Y.BOND":1,"VWOB":1,"US7Y.BOND":1,"US6M.BOND":1,"US5Y.BOND":1,"US30Y.BOND":1,"US2Y.BOND":1,"US12M.BOND":1,"US10Y.BOND":1,"EMB":1,"FDN":0.9,"US912797GB79.BOND":0.6,"US912797GK78.BOND":0.6,"US912797GL51.BOND":0.6,"US912797GW17.BOND":0.6,"US912797HE00.BOND":0.6},"content_text":"Bonds have been volatile, but emerging market sovereign debt may be a suitable option in a weak dollar environment.Vanguard Emerging Markets Government Bond Index Fund ETF Shares offers exposure to emerging economies with low fees and moderate risk.The VWOB ETF provides diversification across developing countries, with a focus on bonds rated B and up, offering a nice yield.   ryasick Bonds have been a mess for three years, with the Fed engineering the fastest rate hike cycle in history. We went through the worst bear market for Treasuries in history, but the good news is that it appears to finally be over. Bonds broadly look more attractive, and if the Dollar turns lower, anything emerging market-related likely does well. So why not consider emerging market sovereign debt in a weak dollar environment if one is indeed coming? One way to play that cycle is through the Vanguard Emerging Markets Government Bond Index Fund ETF Shares (NASDAQ:VWOB). This fund tracks an index composed of US dollar-denominated bonds issued by governments, agencies and state-owned enterprises of emerging market countries. With an expense ratio of only 0.20% and a 30-day SEC yield of around 6.68%, it’s a great way for any income investor to add exposure to emerging economies while keeping fees to a minimum without the volatility of emerging market stocks. VWOB aims to replicate the performance of the Bloomberg USD Emerging Markets Government RIC Capped Index, an index of U.S. dollar-denominated bonds issued by emerging market issuers with maturities greater than a year. The fund uses an indexing strategy by holding a representative sample of the index’s constituents to mimic the index’s risk and return characteristics. A Look At The Holdings Diversification is perhaps the biggest strength of VWOB. It invests in a vast number of developing countries, covering 721 bonds from around 60 countries. No single bond position makes up more than 0.75% of the fund, making this very broad.   vanguard.com Leading positions are held by bonds from but not limited to Qatar and Saudi Arabia, Argentina and Mexico, with geographic exposure that spans Latin America, the Middle East, and Asia. Investors benefit from the attractive growth prospects of multiple emerging economies, with exposure tempered by region-specific risk. The holdings get the fund to an average duration of 7.1 years. This provides a good mixture of interest rate risk and return potential, making it a good choice for a more moderate investor with a longer investment horizon, especially in a falling rate environment. Sector Composition and Weightings Similarly, VWOB’s sector composition is not surprising, nor should it be, as it is representative of emerging market economies. Saudi Arabia makes up the largest allocation at nearly 12% of the fund, followed by Mexico in 2nd and Turkey in 3rd. The mix is well spread out overall.   vanguard.com The key thing here, of course, is the credit rating of the bonds themselves. The vast majority of the fund is rated B and up, with 7.3% ranked at CCC or lower. Yes — there is risk here from a credit quality perspective, but you are at least compensated for it with a nice yield. The diversification overall should help mitigate the impact of a single country running into trouble with its bonds.   vanguard.com Peer Comparison VWOB’s relative performance and positioning can best be understood by comparing it with other emerging market debt ETFs. A well-known peer is the iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) which tracks the JP Morgan EMBI Global Core Index. When we look at the price ratio of VWOB to EMB, we find that VWOB has slightly underperformed, but the two funds, for all intents and purposes, seem to behave the same.   stockcharts.com Pros and Cons On the positive side? This is an easy way to diversify. It’s hard for investors in the US to imagine buying these types of bond securities, let alone knowing how to even do so country by country. VWOB allows for, in a single trade, broad access to parts of the world that most would not even consider trying security selection in. It’s diverse, got a strong yield, and is cheap. But of course, there are risks. In particular, emerging market bonds are more susceptible to political shocks and economic volatility – or even events such as a plunge in the local currency. Bonds issued by governments in emerging markets might also be cut off from the market of potential long-term investors, due to a reluctance among investors to purchase anything from a country where the government might be on shaky ground. Accordingly, these governments could struggle to repay their bondholders, and could fall into default or restructuring. Conclusion  Overall, I like the Vanguard Emerging Markets Government Bond ETF. It allows investors the ability to tilt their fixed-income allocations towards more growth-oriented economies and reap the benefits of emerging markets. I like that it has some duration, and if the Dollar does begin to reverse its strength, this becomes even more compelling as a buy and hold allocation.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2452369456"}