Emerging Europe Bond

Emerging Europe bond mutual Funds and ETFs invest the majority of their... Emerging Europe bond mutual Funds and ETFs invest the majority of their assets in the government and corporate debt of emerging European countries. Emerging countries in Europe include nations such as Slovenia, Lithuania, and Slovakia. These funds can be actively or passively managed and may seek to track or outperform a particular benchmark. They may hedge foreign currency risk, or elect to leave themselves exposed to fluctuations in other nations’ currencies. Depending on their mandate, Emerging European bond mutual Funds and ETFs may focus on investment-grade bonds, high-yield (a.k.a. junk bonds), or a mix of credit quality. Governments are major issuers of bonds in emerging Europe, although government debt-GDP ratios tend to be lower than in developed market economies. The Czech Republic, for instance, had a government debt-to-GDP ratio of 44% in 2022. Investors purchase these funds to get both capital growth and income, and to benefit from the possibility of stronger growth than developed markets. These funds can be risky, however. For instance, emerging European economies such as Turkey can be prone to significant currency depreciation and soaring interest rates, both of which can have a very negative effect on bonds. Last Updated: 04/19/2024 View more View less

Emerging Europe bond mutual Funds and ETFs invest the majority of their assets in the government and corporate debt of emerging European countries. Emerging countries in Europe include nations such as Slovenia, Lithuania,... Emerging Europe bond mutual Funds and ETFs invest the majority of their assets in the government and corporate debt of emerging European countries. Emerging countries in Europe include nations such as Slovenia, Lithuania, and Slovakia. These funds can be actively or passively managed and may seek to track or outperform a particular benchmark. They may hedge foreign currency risk, or elect to leave themselves exposed to fluctuations in other nations’ currencies. Depending on their mandate, Emerging European bond mutual Funds and ETFs may focus on investment-grade bonds, high-yield (a.k.a. junk bonds), or a mix of credit quality. Governments are major issuers of bonds in emerging Europe, although government debt-GDP ratios tend to be lower than in developed market economies. The Czech Republic, for instance, had a government debt-to-GDP ratio of 44% in 2022. Investors purchase these funds to get both capital growth and income, and to benefit from the possibility of stronger growth than developed markets. These funds can be risky, however. For instance, emerging European economies such as Turkey can be prone to significant currency depreciation and soaring interest rates, both of which can have a very negative effect on bonds. Last Updated: 04/19/2024 View more View less