WisdomTree Emerging Markets Corporate Bond Fund (NASDAQ: EMCB)

WisdomTree Emerging Markets Corporate Bond Fund (NASDAQ:EMCB), Quote.Headers.trade-ideas

WisdomTree Emerging Markets Corporate Bond Fund

The Fund is an actively managed exchange traded fund (ETF) that seeks to achieve its investment objective through investment in debt securities issued by corporate entities (Corporate Debt) that are domiciled in, or economically tied to, emerging market countries. The issuers of such Corporate Debt will include public, private, and state-owned or sponsored corporations. Under normal circumstances, the Fund will invest at least 80 percent of its net assets, plus the amount of any borrowings for investment purposes, in Corporate Debt. For these purposes, Corporate Debt includes fixed income securities, such as bonds, notes, money market securities and other debt obligations (such as loan participation notes) of emerging market issuers. Corporate Debt does not include derivatives.

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Debunking Myths About The Crisis In Venezuela: An Insider&#39;s Perspective

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After three years as a correspondent in Venezuela, BBC&rsquo;s Daniel Pardo decided to share a look into <a href="http://www.bbc.com/mundo/noticias-america-latina-36837574">five myths</a> he&rsquo;s identified in relation to the country&rsquo;s situation, as perceived by people abroad. Those up-to-date with the news know that almost every mainstream media outlet paints a gloomy picture of famine, insecurity and censorship. But, how bad is the situation really?
<h3>1. There&rsquo;s Famine</h3>
While it is true that some areas in Venezuela are experiencing food shortages, and most people (90 percent according to an Encovi poll) have declared they now eat less and worse, there is no such thing as a widespread famine.
According to U.N. criteria, a famine is defined by severe food scarcity in more than 20 percent of households, a global acute malnutrition rate above 30 percent and death rates above 0.02 percent &mdash; two deaths per 10,000 people per day. In comparison, the most pessimistic figures for Venezuela point toward 20 to 25 percent malnutrition rate and a death rate that does not even reach one person per 1 million people per day.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/node/8089042">The Great Beer Catastrophe: Venezuela's Economic Crisis Has Sobering Consequences</a></bzrelatedlink>
<h3>2. Venezuela And Cuba Are The Same</h3>
Pardo cited three main arguments people are using to argue that Venezuela has &ldquo;Cubanized&rdquo;: long lines to purchase rationed products, a dual economy and a militarized government. And, while there is some truth in these statements, Venezuela remains a capitalist economy with a still large private sector &mdash; and presence of international brands like McDonald&#39;s Corporation (NYSE: <a class="ticker" href="/stock/mcd#NYSE">MCD</a>) and a large list of U.S. and Spanish banks.
Moreover, Venezuelans have free access to the Internet and the media; Facebook Inc (NASDAQ: <a class="ticker" href="/stock/fb#NASDAQ">FB</a>), Netflix, Inc. (NASDAQ: <a class="ticker" href="/stock/nflx#NASDAQ">NFLX</a>), Twitter Inc (NYSE: <a class="ticker" href="/stock/twtr#NYSE">TWTR</a>) and Alphabet Inc (NASDAQ: <a class="ticker" href="/stock/goog#NASDAQ">GOOG</a>) (NASDAQ: <a class="ticker" href="/stock/googl#NASDAQ">GOOGL</a>)&rsquo;s YouTube are available for everyone, opposite to Cuba. And, of course, Venezuelans can leave the country freely, which Cubans &mdash; arguably &mdash; cannot do.
It should be noted that none of the statements above imply contempt for the Cuban way, but are just a mere differentiation between two countries.
<h3>3. A Dictatorship Is Installed In Venezuela</h3>
While there is much debate among scholars regarding how to categorize Venezuela, one thing is pretty undisputed: It is not a traditional dictatorship &mdash; living in Latin America, I can assure you a dictatorship looks nothing like that!
First off, Pardo explained, opposition exists (even though limited in its expressions, it&rsquo;s there) and elections are conducted periodically &mdash; although results can be questioned.
Now, agreeing on the fact that Venezuela is not a dictatorship is not the same as talking about a full-blown democracy &mdash; although the minimum criteria are met.
<h3>4. Everyone And Their Grandma Hates President Nicolás Maduro</h3>
Again, this is a straight-out lie. Maduro, like many Latin American (and world) leaders, is a polarizing figure. People tend to either love him or hate him; no grays. In this line, 20 to 30 percent of the country&rsquo;s population supports the acting president, diverse polls have shown. However, analysts have argued these numbers are rigged, in the sense that many don&rsquo;t dare to criticize the government, for fear of losing of housing, food and other benefits.
One way or another, &ldquo;30 percent support is more than what the presidents of Brazil, Chile or Colombia boast nowadays,&rdquo; Pardo added.
<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/trading-ideas/long-ideas/16/06/8122924/loving-latin-america-etfs">Loving Latin America ETFs</a></bzrelatedlink>
<h3>5. People Cannot Feel Safe In The Streets</h3>
While it is true that crime rates are quite high in Venezuela, people still go out, even at night, and most return home safely. However, one must keep a low profile, Pardo expounded. Showing riches or opulence are bad ideas, but this applies to almost every country in the world.
Did you like this article? Could it have been improved? Please email <a href="mailto:feedback@benzinga.com">feedback@benzinga.com</a> with the story link to let us know!
Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above.

Debunking Myths About The Crisis In Venezuela: An Insider's Perspective

Investors are well aware that 2015 has been a brutal year for emerging markets equities and currencies. With the dollar strengthening and the Federal Reserve poised to raise interest rates later this year, exchange-traded funds holding developing world debt denominated in local currencies have also been punished in 2015.

	Add to that, there has not been much reason to embrace emerging markets corporate bond ETFs. Actually, a case can be made that with defaults on the rise, such ETFs should be avoided. Citing Standard &amp; Poor&#39;s, the <a href="http:// http://www.wsj.com/articles/emerging-market-corporate-defaults-reach-six-year-high-1448862392">Wall Street Journal</a> reported that emerging markets corporate bond defaults are up 40 percent from last year and reside at the highest levels since 2009.
<h3>
	What Are Some Options?</h3>

	So, give the WisdomTree Emerging Markets Corporate Bond Fund (WisdomTree Trust (NASDAQ: <a class="ticker" href="/stock/emcb#NASDAQ">EMCB</a>)) some credit for being down just 6.5 percent year-to-date. Obviously, that performance is nothing to crow about, but the largest U.S.-focused investment-grade corporate bond ETF has also traded lower this year.
<h3>
	Looking At EMCB</h3>

	Credit risk is not substantial with EMCB, as bonds rated AA, A or BBB combine for nearly 52 percent of the ETF&#39;s weight. And the good news is the nearly 80 bonds held by EMCB are dollar-denominated, meaning the ETF is less vulnerable to changes in Federal Reserve policy.

	&ldquo;Note, unlike many of the sovereign countries that issue their debt in U.S. dollars and earn revenue solely in their local currencies&ndash; leading to a different and often hidden currency risk due to the debt being owed to lenders in U.S. dollars&mdash;many emerging market corporations, especially commodity-centric ones, also earn their revenue in U.S. dollars. These emerging market corporations therefore have a better asset and liability matching than the countries issuing debt in U.S. dollars,&rdquo; said <a href="http://www.wisdomtree.com/blog/index.php/how-to-be-a-contrarian-while-managing-the-currency-risk/">WisdomTree</a> in a recent research note.&nbsp;

	Risks to EMCB&#39;s lineup include the potential for more corporate debt downgrades in Brazil and the potential for the same in Russia&#39;s energy sector. Brazil and Russia combine for just over 23 percent of EMCB&#39;s weight. On the other hand, EMCB features no exposure to South African or Turkish corporates, which is notable because those countries are believed to be <a href="http://www.benzinga.com/news/15/09/5834560/turkey-etf-could-be-next-to-be-stung-by-credit-downgrade">at a risk of sovereign downgrades</a>, an event that could stoke concern about the health of private sector debt issuers.&nbsp;

	&ldquo;While neutralizing the currency headwind to returns did improve the picture, it was still not quite enough for a positive return. However, this shows just how important it is to think carefully about different emerging market options. We think that pairing an investment vehicle like EMCB with other emerging market investments that may have currency exposure could offer an interesting strategy,&rdquo; adds WisdomTree.

	EMCB, which allocates nearly 27 percent of its combined weight to Chinese and Hong Kong corporates, has a 30-day SEC yield of 5.16 percent and an effective duration of 5.19 years.

The global credit markets received a jolt on Monday, when the Russian Central Bank increased its <a href="http://www.bloomberg.com/news/2014-12-15/russia-increases-key-interest-rate-to-17-to-stem-ruble-decline.html">key interest rate</a> from 10.50 percent to 17 percent in a single motion.

	That action was taken as a result of the rapid declines the country is experiencing in their currency markets along with concerns over the financial viability of this commodity-focused economy.

	Interest rate hikes of this magnitude are almost unprecedented and underscore the severe effects that <a href="http://www.benzinga.com/topic/oil">oil producing nations</a> are undergoing during this deflationary cycle.

	The effects of these central bank policy changes and concomitant spread widening in other developing nations have put emerging market bonds under the microscope once again.

	<bzrelatedlink>Related Link: <a href="http://www.benzinga.com/opinion/14/12/5084023/why-were-running-the-risk-of-a-1998-style-global-financial-panic">Why We&#39;re Running The Risk Of A &#39;1998-Style&#39; Global Financial Panic</a></bzrelatedlink>
<h3>
	iShares JPMorgan USD Emerging Markets</h3>

	The iShares JPMorgan USD Emer Mkt Bnd Fd ETF (NYSE: <a class="ticker" href="/stock/emb#NYSE">EMB</a>) tracks a broad basket of <a href="http://www.benzinga.com/topic/us-dollar">U.S. dollar</a> denominated sovereign bonds from more than 30 individual emerging market nations.

	This includes countries such as Russia, China, Turkey, Mexico and Indonesia to name a few. This ETF has a duration of seven years and a current 30-day SEC yield of 4.91 percent.

	EMB is off 6 percent in the month of December as fixed-income investors have pulled back on their risk appetite for high yielding foreign bonds.
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<h3>
		PowerShares Emerging Market Sovereign</h3>

		The PowerShares Emerging Market Sovere (ETF) (NYSE: <a class="ticker" href="/stock/pcy#NYSE">PCY</a>) tracks a similar broad-based bond portfolio as EMB and has seen a comparable draw down this month. Prior to this credit shock, emerging market bonds were one of the leading sectors of the fixed-income market in 2014.
<h3>
		WisdomTree Emerging Markets</h3>

		A look at corporate bonds via the WisdomTree Emerging Markets Trust (NASDAQ: <a class="ticker" href="/stock/emcb#NASDAQ">EMCB</a>) shows an even sharper decline from the highs. EMCB is off 9 percent in December as above-average exposure to bonds of Brazil, Mexico and Russia have contributed to heavy selling.

		It&rsquo;s worth noting that this emerging market corporate bond ETF is actively managed and can adjust its credit, duration and country exposure as needed to weather this style of volatility.

		The majority of the credit exposure in EMCB is currently focused in the BB and BBB-rated spectrum.

		Disclosure: At the time this article was published, the author was long EMB.
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Currency ETFs

PowerShares Emerging Markets Sovereign  Portfolio

Emerging Market Bond ETFs Feel Global Credit Crunch

Here is the ETF Professor's ETF Watch List for Monday, September 9, 2013.

The iShares MSCI Japan ETF (NYSE: <a class="ticker" href="/stock/ewj#NYSE">EWJ</a>) should be in play.

Give the WisdomTree SmallCap Dividend Fund (NYSE: <a class="ticker" href="/stock/des#NYSE">DES</a>) a look.

The Market Vectors Biotech ETF (NYSE: <a class="ticker" href="/stock/bbh#NYSE">BBH</a>) is one to watch.

Emerging markets plays of the day: WisdomTree Emerging Markets SmallCap Dividend Fund (NYSE: <a class="ticker" href="/stock/dgs#NYSE">DGS</a>), iShares MSCI Chile ETF (NYSE: <a class="ticker" href="/stock/ech#NYSE">ECH</a>) and the Market Vectors Indonesia ETF (NYSE: <a class="ticker" href="/stock/idx#NYSE">IDX</a>).

Forex play of the day: CurrencyShares Australian Dollar Trust (NYSE: <a class="ticker" href="/stock/fxa#NYSE">FXA</a>).

Bond play of the day: WisdomTree Emerging Markets Corporate Bond Fund (NASDAQ: <a class="ticker" href="/stock/emcb#NASDAQ">EMCB</a>).

News

Sector ETFs

Broad U.S. Equity ETFs

Short Ideas

Specialty ETFs

New ETFs

Pre-Market Outlook

WisdomTree Trust WisdomTree SmallCap Dividend

Wisdomtree Emerging Markets Smallcap Dividend Fund

ETFs to Watch September 9, 2013 (DES, EWJ, FXA)

Here is the ETF Professor's ETF Watch List for Friday, July 26, 2013.

The Market Vectors Oil Services ETF (NYSE: <a class="ticker" href="/stock/oih#NYSE">OIH</a>) will be in play.

Keep an eye on the iShares MSCI Japan ETF (NYSE: <a class="ticker" href="/stock/ewj#NYSE">EWJ</a>).

Can the Technology Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlk#NYSE">XLK</a>) break resistance?

The Consumer Staples Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlp#NYSE">XLP</a>) is one to watch.

Emerging markets plays of the day: WisdomTree India Earnings ETF (NYSE: <a class="ticker" href="/stock/epi#NYSE">EPI</a>), iShares MSCI Thailand ETF (NYSE: <a class="ticker" href="/stock/thd#NYSE">THD</a>) and the Market Vectors Russia ETF (NYSE: <a class="ticker" href="/stock/rsx#NYSE">RSX</a>).

Forex play of the day: PowerShares DB Dollar Bullish (NYSE: <a class="ticker" href="/stock/uup#NYSE">UUP</a>).

Bond play of the day: WisdomTree Emerging Markets Corporate Bond ETF (NYSE: <a class="ticker" href="/stock/emcb#NYSE">EMCB</a>).

Market Vectors Russia ETF Trust Shares of Beneficial Interest

iShares MSCI Thailand Investable Market Index Fund

PowerShares DB US Dollar Index Bullish Fund

ETFs to Watch July 26, 2013 (OIH, UUP, XLP)

Here is the ETF Professor's ETF Watch List for Friday July 19, 2013.

	Obvious play of the day: Technology Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlk#NYSE">XLK</a>).

	Keep an eye on the Teucrium Corn Fund (NYSE: <a class="ticker" href="/stock/corn#NYSE">CORN</a>).

	Give the Vanguard High Dividend Yield Indx ETF (NYSE: <a class="ticker" href="/stock/vym#NYSE">VYM</a>) a look.

	The PowerShares DB Commodity Index Tracking ETF (NYSE: <a class="ticker" href="/stock/dbc#NYSE">DBC</a>) has been perking up.

	Emerging markets plays of the day: Market Vectors Brazil Small-Cap ETF (NYSE: <a class="ticker" href="/stock/brf#NYSE">BRF</a>), Market Vectors Russia ETF (NYSE: <a class="ticker" href="/stock/rsx#NYSE">RSX</a>) and the iShares MSCI Chile ETF (NYSE: <a class="ticker" href="/stock/ech#NYSE">ECH</a>).

	Forex play of the day: CurrencyShares Japanese Yen Trust (NYSE: <a class="ticker" href="/stock/fxy#NYSE">FXY</a>).

	Bond play of the day: WisdomTree Emerging Makets Corporate Bond ETF (NASDAQ: <a class="ticker" href="/stock/emcb#NASDAQ">EMCB</a>).

CORN

PowerShares DBmmodity Index Optimum Yield Diversified Fund

ETFs to Watch July 19, 2013 (EMCB, FXY, XLK)

Here is the ETF Professor's ETF Watch List for Friday May 24, 2013.

	The Global X Silver Miners ETF (NYSE: <a class="ticker" href="/stock/sil#NYSE">SIL</a>) is worth a look.

	Obvious plays of the day: iShares MSCI Japan Index Fund (NYSE: <a class="ticker" href="/stock/ewj#NYSE">EWJ</a>) and the Utilities Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlu#NYSE">XLU</a>).

	Keep an eye on the Vanguard Consumer Staples ETF (NYSE: <a class="ticker" href="/stock/vdc#NYSE">VDC</a>).

	Emerging markets plays of the day: PowerShares DWA Emerging Markets Technical Leaders Portfolio (NYSE: <a class="ticker" href="/stock/pie#NYSE">PIE</a>), Market Vectors Indonesia ETF (NYSE: <a class="ticker" href="/stock/idx#NYSE">IDX</a>) and the Market Vectors Vietnam ETF (NYSE: <a class="ticker" href="/stock/vnm#NYSE">VNM</a>).

	Forex play of the day: ProShares UltraShort Yen (NYSE: <a class="ticker" href="/stock/ycs#NYSE">YCS</a>).

	Bond play of the day: WisdomTree Emerging Markets Corporate Bond ETF (NASDAQ: <a class="ticker" href="/stock/emcb#NASDAQ">EMCB</a>).

PowerShares DWA Emerging Markets Technical Leaders

ETFs to Watch May 24, 2013 (EWJ, VDC, XLU)

Here is the ETF Professor's ETF Watch List for Tuesday, May 14, 2013.

The Market Vectors Gaming ETF (NYSE: <a class="ticker" href="/stock/bjk#NYSE">BJK</a>) continues to impress.

Keep an eye on the iShares MSCI Canada Index Fund (NYSE: <a class="ticker" href="/stock/ewc#NYSE">EWC</a>).

The First Trust NYSE Arca Biotech Index Fund (NYSE: <a class="ticker" href="/stock/fbt#NYSE">FBT</a>) is on fire.

Emerging markets plays of the day: WisdomTree India Earnings ETF (NYSE: <a class="ticker" href="/stock/epi#NYSE">EPI</a>), iShares Emerging Markets Dividend Fund (NYSE: <a class="ticker" href="/stock/dvye#NYSE">DVYE</a>) and the iShares MSCI Turkey Investable Market Index Fund (NYSE: <a class="ticker" href="/stock/tur#NYSE">TUR</a>).

Forex play of the day: ProShares UltraShort Euro (NYSE: <a class="ticker" href="/stock/euo#NYSE">EUO</a>).

Bond play of the day: WisdomTree Emerging Markets Corporate Bond ETF (NASDAQ: <a class="ticker" href="/stock/emcb#NASDAQ">EMCB</a>).

DVYE

First Trust NYSE Arca Biotechnology Index Fund

iShares MSCI Turkey Investable Market Index Fund

ETFs to Watch May 14, 2013 (EWC, FBT, TUR)

Actively managed ETFs remain just a sliver of the overall ETF universe.

	There are 1,445 ETFs and ETNs trading in the U.S., but a mere 58 are actively managed, a figure that equals just four percent of the U.S. exchange traded products universe, <a href="http://www.etftrends.com/2013/04/active-etf-market-gearing-up/">according to ETF Trends</a>.

	And when it comes to the conversation about actively managed ETFs, one fund stands above all others: The PIMCO Total Return ETF (NYSE: <a class="ticker" href="/stock/bond#NYSE">BOND</a>). Colloquially referred to as the "Bill Gross ETF," BOND has attracted over $4.8 billion in assets in less than 14 months of trading.

	That is an impressive haul and to be fair, BOND has delivered with a gain of 11 percent in the past year. The downside of BOND's dominance and popularity is that some other actively managed ETFs worthy of investors' consideration have almost been doomed to under the radar existences. That should not be the case as the following funds prove.

	AdvisorShares Cambria Global Tactical ETF (NYSE: <a class="ticker" href="/stock/gtaa#NYSE">GTAA</a>) 
	The Cambria Global Tactical ETF is managed by Mebane Faber's Cambria Investment Management and a simple way of looking at this ETF is that it is an ETF fund of funds. Meaning all of GTAA's roughly 65 holdings are other ETFs.

	That strategy leads to a broad mix of asset classes as foreign stocks, emerging markets equities, U.S. stocks and U.S. real estate names all receive double-digit allocations within the fund. U.S. bonds and commodities combine for another 23 percent of the fund's weight. GTAA's top holdings include the Vanguard REIT Index ETF (NYSE: <a class="ticker" href="/stock/vnq#NYSE">VNQ</a>), SPDR Dow Jones International Real Estate ETF (NYSE: <a class="ticker" href="/stock/rwx#NYSE">RWX</a>) and the iShares MSCI Belgium Investable Market Index Fund (NYSE: <a class="ticker" href="/stock/ewk#NYSE">EWK</a>).

	GTAA has a gross expense ratio of 1.41 percent, <a href="http://advisorshares.com/fund/gtaa">according to AdvisorShares data</a>. On that note, it should be highlighted that GTAA's fees <a href="http://www.mebanefaber.com/2010/09/29/cambria-global-tactical-etf-nysegtaa/">will be reduced as the funds attracts more assets</a>. The ETF has been a solid performer gaining 8.5 percent in the past year and 4.1 percent year-to-date.

	WisdomTree Emerging Markets Corporate Bond Fund (NASDAQ: <a class="ticker" href="/stock/emcb#NASDAQ">EMCB</a>) 
	The WisdomTree Emerging Markets Corporate Bond Fund had the misfortune of debuting around the same time that BOND came to market. While the two funds obviously have vastly different objectives, EMCB's place in the actively managed ETF conversation arguably suffered, at least initially. That is starting to change for the better.

	As it should. EMCB has attracted over $128 million in assets under management and has returned more than seven percent since its debut. Notably, EMCB does not represent increased credit risk for corporate bond investors as nearly 61 percent of the ETF's holdings are rated BBB. Another 11.3 percent are rated AA or A.

	Country allocations here are important and this is where EMCB has the potential to deliver for investors. EMCB devotes a combined 42.3 percent of its weight to Mexico and Russia, <a href="http://www.benzinga.com/analyst-ratings/analyst-color/13/04/3460980/profit-from-mexican-corporates-with-this-etf">two corporate bond markets currently viewed as attractive</a> by some portfolio managers.

	And for what it is worth, DoubleLine's Jeffrey Gundlach said on Thursday emerging markets corporates are the best area of investment-grade fixed income at the moment, <a href="http://blogs.barrons.com/emergingmarketsdaily/2013/04/11/the-return-of-emerging-market-bonds-gundlach-likes-corporates/">Barron's reported</a>.

	EMCB's effective duration is 6.03 years with an average yield to maturity of 4.44 percent.

	WisdomTree Asia Local Debt Fund (NYSE: <a class="ticker" href="/stock/ald#NYSE">ALD</a>) 
	By the standards of actively managed ETFs, the WisdomTree Asia Local Debt Fund is a behemoth with over $547 million in AUM. The fund is deserving of those assets and has proven as much. With the recent upgrade by Fitch Ratings of the Philippines to investment-grade territory, <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/04/3490395/looking-for-good-credit-among-em-bond-etfs">all of ALD's constituent countries have investment-grade ratings</a> from at least one major ratings agency.

	Additionally, although ALD has "Asia" in its name, it should be pointed out this not a pure play emerging markets fund. Rather, ALD does a fine job of mixing in AAA-rated developed markets such as Australia, Hong Kong and Singapore along with high-yielding New Zealand and rapidly growing emerging markets such as Thailand, Malaysia and Indonesia.

	ALD is also attractive regarding sensitivity to interest rate increases with an effective duration of just 3.52 years. The ETF's average yield to maturity is 2.73 percent and the fund has a 30-day SEC yield of 2.25 percent.

	For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

Global

Intraday Update

BOND

iShares MSCI Belgium Ivestable Market Index Fund

GTAA

Three Actively Managed ETFs to Consider Right Now

There is a lot to like when it comes to Mexican sovereign debt.

	While Latin America's second-largest economy is rated BBB by Standard &amp; Poor's, just above junk status, there is little chance that rating will be downgraded anytime soon and the yields on U.S. Treasuries pale in comparison to their Mexican counterparts.

	For example, the yield on 10-year Mexican sovereigns <a href="http://www.investing.com/rates-bonds/mexico-government-bonds">currently resides at 4.95 percent</a>. Home to tame inflation, favorable tax rates and a new reform-minded president, it is not surprising that some <a href="http://www.benzinga.com/markets/bonds/13/02/3310348/gross-peso-tweet-not-doing-much-for-em-bond-etfs">noteworthy investors are bullish on Mexican sovereigns</a>.

	Perhaps investors should feel the same way about Mexican corporate debt. As one example of a reason why Mexican corporates are worth a look, Standard &amp; Poor's recently revised its outlook on Mexico's state-run oil giant Petróleos Mexicanos, or Pemex, and that could prompt a credit rating upgrade sometime in the next 18 months.

	Pemex "also serves as a useful case study for why we are optimistic about Mexican and emerging market corporate debt as a complement for more traditional corporate credit instruments of U.S. companies," said WisdomTree Portfolio Manager Rick Harper in a new research note.

	Harper also notes the improving U.S. economy and government reforms initiated by President Enrique Peña Nieto as potential catalysts for Mexican corporates. At the ETF level, investors have at least one credible choice for gaining exposure to corporate debt issued by Mexican companies, that being the WisdomTree Emerging Markets Corporate Bond Fund (NASDAQ: <a class="ticker" href="/stock/emcb#NASDAQ">EMCB</a>).

	EMCB, which is nearly 13 months old, has almost $128 million in assets under management. More importantly, the first ETF to serve as a pure play on emerging markets corporate bonds allocates almost 20.2 percent of its weight to Mexico. That makes Mexico the third-largest country weight in EMCB behind Brazil (26.33 percent) and Russia (21.96 percent).

	Harper points out that EMCB's weight to Mexico is nearly triple that of the ETF's benchmark and almost twice that of the <a href="http://www.wisdomtree.com/blog/index.php/bullish-on-mexican-corporate-debt/?elqCampaignId=336">JPMorgan EMBI Global Index</a>.

	While Mexico is EMCB's third-largest country weight, individual Mexcian issues represent two of the ETF's top three holdings. Overall, EMCB has 33 holdings, five of which come courtesy of Mexican issuers, <a href="http://www.wisdomtree.com/etfs/fund-holdings-fixed-income.aspx?etfid=79">according to WisdomTree data</a>.

	More than 60.5 percent of EMCB's holdings are rated BBB and another 8.1 percent are rated A. The ETF's effective duration is 6.05 years with an average yield to maturity of 4.56 percent.

	When EMCB debuted in March 2012, some critics thought the ETF was too narrowly focused to hold broad appeal for investors. Clearly, inflows to the fund have said otherwise. Additionally, EMCB's success prompted the creation of not one, but two copycat funds.

	However, the iShares Emerging Markets Corporate Bond Fund (BATS: CEMB) and the BofA Merrill Lynch Emerging Markets Corporate Bond ETF (NYSE: <a class="ticker" href="/stock/emcd#NYSE">EMCD</a>) are both far smaller than the WisdomTree offering and neither offer the exposure to Mexico that EMCB does. For example, the iShares Emerging Markets Corporate Bond Fund has a weight of just 8.62 percent to Mexico.

	For more on Mexican bonds, click <a href="http://www.benzinga.com/markets/bonds/13/02/3310348/gross-peso-tweet-not-doing-much-for-em-bond-etfs">here</a>.

Analyst Color

Analyst Ratings

Profit From Mexican Corporates With This ETF

There was a time when investing in Russian corporate was a dubious combination of hard to and not advisable for most investors, even professionals. 

In 2004, The Economist <a href="http://www.economist.com/node/2712917">ran a story about Russian corporates</a>, noting demand for the asset class was rapidly sinking. Highlighting how dire the situation was at the time, The Economist story was simply titled "Ugh!"

Less than a decade later, things have changed. While R in the famous BRIC acronym must shed a reputation for political corruption and corporate cronyism, the country's financial markets are showing signs of liberalization. Policymakers there have not been shy about their desire for increased foreign investment. 

Last year, the Russian government made its sovereign debt more accessible by adding Euroclear and Clearstream to the list of eligible clearing houses.

Euroclear recently confirmed Russian corporates are up next and that could be a boon for a market where foreigners control less than 10 percent of assets, <a href="http://blogs.reuters.com/globalinvesting/2013/02/18/russian-companies-next-stop-for-euroclear/">according to Reuters</a>.

In another sign that the Russian corporate bond renaissance is in full bloom, a new ETF devoted exclusively to the asset class debuted yesterday, the Finex Tradable Russian Corporate Bonds Ucits ETF. 

Before ETF naysayers and pundits assail the ETF as too risky or too narrowly focused, it must be noted that the Finex Tradable Russian Corporate Bonds Ucits ETF trades on the London Stock Exchange, not in the U.S.

However, the success of the Finex Tradable Russian Corporate Bonds Ucits ETF could be a barometer for whether an ETF tracking Russian corporate debt will be listed in the U.S. Investors do not need to bet on the debut of Russian corporate bond ETF in the U.S., an unlikely near-term proposition, but there are compelling reasons to consider the existing funds with exposure to Russian corporates.

Not only do emerging markets corporates usually feature superior credit quality relative to developed market equivalents, but those EM bonds <a href="http://www.benzinga.com/markets/bonds/13/02/3363919/corporate-bond-etfs-an-alternative-to-em-sovereigns">often have lower durations</a>, meaning they are less sensitive to interest rate changes.

At the end of January, the average yield to maturity on Russian corporates was 5.11 percent with an average duration of just over five years, <a href="http://www.wisdomtree.com/blog/index.php/gaining-exposure-to-emerging-market-credit-risk/?elqCampaignId=302">according to WisdomTree data</a>. 

That is a better yield to maturity than what can be had on comparable Mexican or Turkish corporate bonds with a lower duration than what is found on equivalent Brazilian and Mexican corporates.

Investors looking to tap into the favorable tailwinds for Russian company-issued debt have a few ETF options, though stands as most credible. The WisdomTree Emerging Markets Corporate Bond Fund (NASDAQ: <a class="ticker" href="/stock/emcb#NASDAQ">EMCB</a>) devotes nearly 21 percent of its weight to Russian corporates. Only Brazil receives a larger allocation in EMCB.

Not only due Russian corporate issues feature high yields, but issuer debt levels are lower than what is seen in other developing nations, giving investors some degree of safety. Important to note is the fact that in 2012, Russian firms issued about $46 billion in corporate bonds compared with $21.7 billion in 2011, <a href="http://blogs.ft.com/beyond-brics/2012/12/06/rosneft-3bn-bond-caps-record-year/#axzz2M20ocw1i">according to the Financial Times</a>. 

Demand was robust, but issuance may not be as high this year. Russian companies need to finance just $9.5 billion in foreign debt this year, <a href="http://www.4-traders.com/news/Russian-Corporate-Bond-Issuance-To-Drop-in-2013-But-Rosneft-To-the-Fore--15661015/">Dow Jones reported</a>. 

It is widely expected Russian financial services firms will sell fewer corporate bonds and while OAO Rosneft, Russia's largest oil company, is forecast to issue about $7 billion to help pay for its purchase of TNK-BP, a scarcity premium could creep into the market. 

That could lead to upside for EMCB, which has an average yield to maturity of 4.52 percent and an effective duration of 6.1 years. EMCB's rivals, the iShares Emerging Markets Corporate Bond Fund (NYSE: <a class="ticker" href="/stock/emcb#NYSE">EMCB</a>) and the SPDR BofA Merrill Lynch Emerging Markets Corporate Bond ETF (NYSE: <a class="ticker" href="/stock/emcd#NYSE">EMCD</a>), feature exposure to Russia though not on par with that of the WisdomTree fund.

Conservative investors that want a small taste of Russian corporates should consider the WisdomTree Global Corporate Bond Fund (NASDAQ: <a class="ticker" href="/stock/glcb#NASDAQ">GLCB</a>). That newly minted ETF has a weight of almost 4.5 percent to Russia.

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

Events

GLCB

Resurgent Russian Corporates Present ETF Opportunities

Investors embraced emerging markets sovereign debt, both the dollar-denominated and local currency varietals, in significant fashion last year. 

Returns generated by <a href="http://www.benzinga.com/markets/bonds/13/02/3306771/low-vol-etf-leads-powershares-2012-inflows">and inflows to the ETFs</a> tracking this asset class affirm that assertion.

Due to higher yields than what is available on U.S. Treasuries and other developed market bonds and, in many cases, stronger government balance sheets, emerging markets sovereign debt has attracted an increasingly large following among developed market investors. However, there is an alternative that should not be ignored.

That being emerging markets corporate debt. Previously inaccessible via ETFs, developing world corporates made a splash on the ETF scene last year when the WisdomTree Emerging Markets Corporate Bond Fund (NASDAQ: <a class="ticker" href="/stock/emcb#NASDAQ">EMCB</a>) debuted in March. 

Those that thought emerging markets corporates would be too much of niche play for most investors have had to eat their words. EMCB <a href="http://www.benzinga.com/markets/bonds/12/10/3036081/investors-pouring-cash-into-em-bond-funds">had $88 million in assets under management in late October</a>. That number now resides at $126.6 million. Translation: EMCB' AUM total has surged almost 44 percent in five months.

So successful has EMCB been that it prompted the creation of not one, but two copycat funds, the iShares Emerging Markets Corporate Bond Fund (NYSE: <a class="ticker" href="/stock/cemb#NYSE">CEMB</a>) and the SPDR BofA Merrill Lynch Emerging Markets Corporate Bond ETF (NYSE: <a class="ticker" href="/stock/emcd#NYSE">EMCD</a>). Proliferation and success of ETFs are not the only reasons investors should consider developing world corporates.

"Due to growth in new issuance, the investable universe of emerging market (EM) corporate debt is now larger than the market for EM U.S. dollar (USD) sovereigns," said WisdomTree Portfolio Manager Rick Harper in a new research note. "On average, EM corporate bonds currently feature higher credit quality, less sensitivity to changes in U.S. interest rates, and offer greater incremental income potential than EM USD sovereigns."

Harper's observations jibe with comments made by <a href="http://www.benzinga.com/analyst-ratings/analyst-color/12/10/3043478/pimco-bullish-on-em-corporate-bonds">PIMCO in late October</a>. 

In a note written by PIMCO's Ignacio Sosa and Anton Dombrovsky, the bond house said "the dollar-denominated EM corporate market has been growing steadily, and many corporates can offer higher yields and lower durations than sovereigns."

As of the end of January, the J.P. Morgan EMBI Global EM USD Sovereigns universe had a market size of just under $572 billion compared to a market size of nearly $624.5 billion for the J.P. Morgan CEMBI Broad EM Corporates realm, <a href="http://www.wisdomtree.com/blog/index.php/gaining-exposure-to-emerging-market-credit-risk/?elqCampaignId=302">according to WisdomTree data</a>.

The data confirm Harpers comments about superior credit quality and less sensitivity to U.S. interest rate fluctuations. Over 73 percent of the aforementioned emerging markets corporate bond gauge is rated investment-graded compared to less than 62 percent for the sovereign debt index. 

Average duration for the corporates is 5.59 years compared to 7.5 years for the sovereigns. Duration measures a bond's sensitivity to interest rate changes.

Evidence has started to mount that EM corporates represent a valid alternative or complement to sovereign debt.

"We believe that the factors that led to EM USD sovereign outperformance may be waning," said Harper. "In our view, EM corporate bonds offer the next wave of opportunities in EM fixed income. For example, in Russia, investing in corporate bonds as opposed to government debt resulted in a 1.64% increase in yield, with less interest rate risk as of February 15, 2013."

With an allocation of 20.99 percent, Russia is EMCB's second-largest country weight behind Brazil. Mexico, Hong Kong and Colombia round out the top-five country weights in the ETF. EMCB also features exposure to Jamaica, Kazakhstan and Venezuela, among others, and that may have investors pondering if they will be adequately compensated for the perceived added risk.

"In an investment environment where investors are constantly questioning whether they are being adequately compensated for the amount of credit risk they are assuming, they are simultaneously confronting the prospect of higher long-term interest rates," Harper said. "We believe EM corporate debt could provide an attractive solution to this dilemma. By enhancing yield potential and overall credit quality, while at the same time reducing interest rate risk, EM corporate bonds could provide attractive total returns compared to EM USD sovereign debt in 2013."

Indeed, EM corporates do feature attractive yields. The average yield to maturity on investment-grade bonds in J.P. CEMBI Broad EM Corporates Index is 36 basis points higher than the highly-rated issues in the sovereigns index. For the junk issues, the yield-to-maturity difference is 39 basis points in favor of corporates, though corporates often feature better yields than government debt.

A more relevant comparison is EMCB to the iShares iBoxx $ Investment Grade Corporate Bond Fund (NYSE: <a class="ticker" href="/stock/lqd#NYSE">LQD</a>), the largest corporate bond ETF by assets. EMCB has a 30-day 3.78 percent compared to 2.9 percent for LQD. EMCB's effective duration is 6.17 years compared to 7.69 years for LQD.

Dividends

CEMB

Corporate Bond ETFs: An Alternative to EM Sovereigns

Here is the ETF Professor's ETF Watch List for Tuesday, February 12, 2013.

The Market Vectors Junior Gold Miners ETF (NYSE: <a class="ticker" href="/stock/gdxj#NYSE">GDXJ</a>) continues to get hit.

Give the IndexIQU.S. Real Estate Small Cap ETF (NYSE: <a class="ticker" href="/stock/roof#NYSE">ROOF</a>) a look.

The Guggenheim Defensive Equity ETF (NYSE: <a class="ticker" href="/stock/def#NYSE">DEF</a>) could be worth a trade.

Emerging markets plays of the day: ProShares UltraShort FTSE China 25 (NYSE: <a class="ticker" href="/stock/fxp#NYSE">FXP</a>), iShares MSCI Turkey Investable Index Fund (NYSE: <a class="ticker" href="/stock/tur#NYSE">TUR</a>) and the iShares MSCI All Peru Capped Index Fund (NYSE: <a class="ticker" href="/stock/epu#NYSE">EPU</a>).

Forex play of the day: CurrencyShares Australian Dollar Trust (NYSE: <a class="ticker" href="/stock/fxa#NYSE">FXA</a>).

Bond play of the day: WisdomTree Emerging Makets Corporate Bond ETF (NASDAQ: <a class="ticker" href="/stock/emcb#NASDAQ">EMCB</a>).

GDXJ

ROOF

ETFs to Watch February 12, 2013 (FXP, GDXJ, TUR)

Here is the ETF Professor's ETF Watch List for Wednesday, February 6, 2013.

The iShares MSCI Italy Index Fund (NYSE: <a class="ticker" href="/stock/ewi#NYSE">EWI</a>) should be in play again.

Give the PowerShares DB Agriculture Fund (NYSE: <a class="ticker" href="/stock/dba#NYSE">DBA</a>) a look.

Keep an eye on the WisdomTree LargeCap Dividend Fund (NYSE: <a class="ticker" href="/stock/dln#NYSE">DLN</a>).

Emerging markets plays of the day: Market Vectors Brazil Small-Cap ETF (NYSE: <a class="ticker" href="/stock/brf#NYSE">BRF</a>), EGShares Emerging Markets Consumer ETF (NYSE: <a class="ticker" href="/stock/econ#NYSE">ECON</a>) and the Market Vectors Poland ETF (NYSE: <a class="ticker" href="/stock/plnd#NYSE">PLND</a>).

Forex play of the day: PowerShares DB Dollar Bullish (NYSE: <a class="ticker" href="/stock/uup#NYSE">UUP</a>).

Bond play of the day: WisdomTree Emerging Markets Corporate Bond Fund (NASDAQ: <a class="ticker" href="/stock/emcb#NASDAQ">EMCB</a>).

Emerging Global Shares Dow Jones Emerging Marketsnsumer Titan Index Fund

ECON

PLND

ETFs to Watch February 6, 2013 (DLN, ECON, UUP)

When it comes to investment-grade corporate bond ETFs, one fund dominated the arena for years. However, as investors have sought higher yields beyond the confines of U.S. borders, some ETF issuers have obliged with new funds offering access to international investment-grade corporates.

The latest entrant to that competition is the WisdomTree Global Corporate Bond Fund (NASDAQ: GLCB), which debuted Thursday. GLCB will seek to maintain at least 55 percent of its holdings in investment grade assets, with the ability to also invest in U.S. and international high-yield as well as developing world corporates, according to a statement issued by WisdomTree.

GLCB <a href="http://www.wisdomtree.com/about/pdf/WisdomTree-WisdomTree-Launches-Global-Corporate-Bond-Fund-GLCB-911.pdf">intends to have an intermediate-term duration of two to 10 years</a>.

For now, the actively managed GLCB devotes over 51 percent of its weight to U.S. corporates. The U.K. is the next largest country weight at 9.6 percent, but after that GLCB does an admirable job of mixing developed and developing markets together. 

For example, Italy and Russia essentially have the same weights at just under 4.5 percent while Brazil and Germany each account for just over three percent of the new ETF's weight. Other country allocations include Mexico, France, Canada and Colombia.

"We believe a broad global approach incorporating active credit analysis presents an opportunity to manage risk, liquidity and find opportunities for relative value over changing credit and interest rate cycles," said WisdomTree Chief Investment Strategist Luciano Siracusano in the statement. "In contrast to market capitalization-based fixed income index funds, GLCB is an actively managed ETF designed with the flexibility to invest – and rotate – across fixed income sectors and issuers around the world."

Regarding credit risk, while GLCB can tap various high-yield markets, its current holdings are predominantly investment-grade. Nearly 73 percent of the fund's holdings are rated AA, A or BBB. 

GLCB's top holdings include issues from Bank of America (NYSE: <a class="ticker" href="/stock/bac#NYSE">BAC</a>), HSBC (NYSE: <a class="ticker" href="/stock/hbc#NYSE">HBC</a>), Goldman Sachs (NYSE: <a class="ticker" href="/stock/gs#NYSE">GS</a>), Russian energy giant Gazprom and Anheuser-Busch Inbev (NYSE: <a class="ticker" href="/stock/bud#NYSE">BUD</a>). The fund's weighted average coupon is 5.7 percent and its average years to maturity is 6.17. 

While a corporate bond ETF with an international focus may seem like a niche concept to some, the opposite is actually true and WisdomTree has proven as much with another actively managed product. The firm launched the WisdomTree Emerging Markets Corporate Bond Fund (NASDAQ: <a class="ticker" href="/stock/emcb#NASDAQ">EMCB</a>) in March 2012. 

Providing investors exposure to emerging markets corporates has proven to be a winning idea. Not only did EMCB's debut lead to the debut of two copycat funds from rival issuers, but the ETF now has over $112 million in assets under management, making it one of last year's more successful new product launches.

With an expense ratio of 0.45 percent, GLCB is less expensive than EMCB, which charges 0.6 percent. Both ETFs are sub-advised by Western Asset Management.

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

A New Twist on Corporate Bond ETFs

Here is the ETF Professor's ETF Watch List for Friday January 4, 2013.

The SPDR S&amp;P Bank ETF (NYSE: <a class="ticker" href="/stock/kbe#NYSE">KBE</a>) could be in focus.

The First Trust ISE-Revere Natural Gas Index Fund (NYSE: <a class="ticker" href="/stock/fcg#NYSE">FCG</a>) is looking decent.

Give the Health Care Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlv#NYSE">XLV</a>).

The Guggenheim Solar ETF (NYSE: <a class="ticker" href="/stock/tan#NYSE">TAN</a>) will be worth a trade.

Emerging markets plays of the day: ProShares UltraShort MSCI Brazil (NYSE: <a class="ticker" href="/stock/bzq#NYSE">BZQ</a>), Market Vectors Indonesia ETF (NYSE: <a class="ticker" href="/stock/idx#NYSE">IDX</a>) and the Global X FTSE Colombia 20 ETF (NYSE: <a class="ticker" href="/stock/gxg#NYSE">GXG</a>).

Forex play of the day: CurrencyShares Swiss Franc Trust (NYSE: <a class="ticker" href="/stock/fxf#NYSE">FXF</a>).

Bond play of the day: WisdomTree Emerging Markets Corporate Bond ETF (NASDAQ: <a class="ticker" href="/stock/emcb#NASDAQ">EMCB</a>).

First Trust ISE-Revere Natural Gas Index Fund

ETFs to Watch January 4, 2013 (FCG, IDX, XLV)

Here is the ETF Professor's ETF Watch List for Thursday, January 3, 2013.

The SPDR S&amp;P Dividend ETF (NYSE: <a class="ticker" href="/stock/sdy#NYSE">SDY</a>) started the new year off on a strong note.

Keep an eye on the Global X Uranium ETF (NYSE: <a class="ticker" href="/stock/ura#NYSE">URA</a>).

The Vanguard Total Stock Market ETF (NYSE: <a class="ticker" href="/stock/vti#NYSE">VTI</a>) is worth a look here.

The Market Vectors Coal ETF (NYSE: <a class="ticker" href="/stock/kol#NYSE">KOL</a>) is at a critical technical juncture.

Emerging markets plays of the day: Market Vectors Egypt ETF (NYSE: <a class="ticker" href="/stock/egpt#NYSE">EGPT</a>), Market Vectors Russia ETF (NYSE: <a class="ticker" href="/stock/rsx#NYSE">RSX</a>) and the iShares MSCI Indonesia Investable Market Index Fund (NYSE: <a class="ticker" href="/stock/eido#NYSE">EIDO</a>).

Forex play of the day: CurrencyShares Australian Dollar Trust (NYSE: <a class="ticker" href="/stock/fxa#NYSE">FXA</a>).

Bond play of the day: WisdomTree Emerging Markets Corporate Bond ETF (NASDAQ: <a class="ticker" href="/stock/emcb#NASDAQ">EMCB</a>).

EGPT

iShares MSCI Indonesia Investable Market Index Fund

EIDO

ETFs to Watch January 3, 2013 (KOL, RSX, VTI)

In a new blog post, Dodd Kittsley, Head of Global ETP Market Trends Research for BlackRock (NYSE: <a class="ticker" href="/stock/blk#NYSE">BLK</a>), identifies four prominent trends the exchange-traded products industry could see in 2013. One of the trends, <a href="http://isharesblog.com/blog/2012/12/26/4-etp-trends-for-2013/">that being double-digit asset growth</a> for the industry at large, is a broader theme. Isolating individual ETFs and ETNs that can benefit from industry-wide asset growth is tricky.

However, the three other trends Kittsley highlights can easily be exploited through individual ETFs. That list starts with...

Robust Interest in Bond Funds
This is an extension of a prominent 2012 theme. As <a href="http://www.benzinga.com/news/12/12/3160109/etf-inflows-on-record-pace-in-2012-says-morningstar">Morningstar noted earlier this month</a>, U.S. bond ETFs hauled in $3.8 billion in inflows in November to bring the year-to-date total through the end of November to $48 billion.

"Bond ETPs account for 31% of all year-to-date industry flows, up from 12% in 2008," said Kittsley.

If a fiscal cliff resolution is not passed before the January 1, 2013 deadline, investors could flee stocks and equity-based ETFs for the comfort of bond funds. The PIMCO Total Return Bond ETF (NYSE: <a class="ticker" href="/stock/bond#NYSE">BOND</a>), which has been the most successful new product launch of 2012, has the advantage of being known as the "Bill Gross ETF." That could spark inflows in a turbulent environment for stocks and other risky assets.

Assuming 2013 starts on a risk off note, that could cap upside for high-yield bond funds, but investors' need for yield is not likely to diminish. That could make the iShares iBoxx $ Investment Grade Corporate Bond Fund (NYSE: <a class="ticker" href="/stock/lqd#NYSE">LQD</a>) attractive. 

Another ETF to consider is the WisdomTree Emerging Markets Corporate Bond Fund (NASDAQ: <a class="ticker" href="/stock/emcb#NASDAQ">EMCB</a>). With over $96.2 million in AUM, EMCB is a successful 2012 ETF launch in its own right. Roughly 70 percent of the fund's holdings are rated investment-grade and the ETF has a 30-day SEC yield of 3.61 percent, 85 basis points higher than LQD's 30-day SEC yield.

Increased Use of Volatility Products
Again, this is an extension <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/08/2805967/the-definitive-guide-to-low-volatility-etfs">of a 2012 theme</a>. Arguably, the volatility ETF movement kicked off in 2011 with the debut of the PowerShares S&amp;P 500 Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>). 

SPLV is now the gold standard of volatility ETFs with almost $3.1 billion in assets under management and this ETF's success has sparked a wave of new product introductions aimed at capturing share in a market segment that has proven wildly popular with investors.

Other low volatility ETFs that could see strong inflows in the new year include the PowerShares S&amp;P 500 High Dividend Portfolio (NYSE: <a class="ticker" href="/stock/sphd#NYSE">SPHD</a>), which debuted just two months ago and already has $28 million in AUM. SPHD is home to 50 stocks "traded on the S&amp;P 500 Index that historically have provided high dividend yields and low volatility," <a href="http://www.invescopowershares.com/products/overview.aspx?ticker=SPHD">according to PowerShares</a>. That gives the ETF a 30-day SEC yield of 4.74 percent.

Investors looking to put the "low vol" theme to work for them <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/11/3076528/low-vol-em-etf-continues-to-impress-with-aum-gains">in the emerging markets</a> have choices as well. Given the rapid success of the iShares MSCI Emerging Markets Minimum Volatility Index Fund (NYSE: <a class="ticker" href="/stock/eemv#NYSE">EEMV</a>), which has attracted $840 million in AUM in just 14 months of trading, it would not be surprising to see more inflows to this sub-sector of the low vol ETF universe. 

An alternative to EEMV is the PowerShares S&amp;P Emerging Markets Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/eelv#NYSE">EELV</a>). EELV debuted in January and spent several months living a fairly anonymous existence. Over the last few months, however, investors have woken up to EELV's story and the fund's AUM total has jumped to $87.4 million.

More Inflows For EM Bond Funds
"In 2012, demand for this class of ETPs doubled to $20 billion. The category now accounts for 6% of the fixed income ETP universe, up from less than 2% going into 2010," according to Kittsley.

Indeed, it feels like hardly a week has passed in 2012 <a href="http://www.benzinga.com/analyst-ratings/analyst-color/12/11/3111740/em-bond-etf-sees-amazing-inflows">without news of another emerging markets bond ETF seeing remarkable inflows</a>. Of course, this has sparked the predictable talk a bubble in emerging markets bonds.

Part of the bubble talk revolves around the fact that companies in the developing world issued <a href="http://online.wsj.com/article/BT-CO-20121218-707850.html">$258 billion in corporate debt this year</a>. That is more than double last year's level, according to the Wall Street Journal. The problem with calling that a bubble is that the appetite is there on the part of global investors to absorb new issuance in 2013 a rate similar to what was seen this year. 

The aforementioned WisdomTree Emerging Markets Corporate Bond Fund should benefit from increased appetite for EM corporate debt. Risk takers can consider the Emerging Markets High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/hyem#NYSE">HYEM</a>), which features dollar-denominated junk bonds from developing world corporate issuers.

Of course, it cannot be forgotten that ETFs tracking emerging markets sovereign debt have longer track records than their corporate counterparts and have been inflow leaders this year. Sovereign debt issuance in the developing world has also been high this year at $85 billion, but that has not been the primary reason investors have embraced this asset class.

The biggest reason why inflows to dollar-denominated ETFs such as the PowerShares Emerging Markets Sovereign Debt Portfolio (NYSE: <a class="ticker" href="/stock/pcy#NYSE">PCY</a>) have been so robust is yield. PCY offers a 30-day SEC yield of 3.92 percent with the comfort of a dollar-based asset and the potential for capital appreciation as more developing nations see their sovereign ratings boosted.

Not to be left out of the equation are ETFs that give investors exposure to bonds denominated in local currencies. This group includes the Market Vectors Emerging Markets Local Currency Bond ETF (NYSE: <a class="ticker" href="/stock/emlc#NYSE">EMLC</a>), the iShares Emerging Markets Local Currency Bond Fund (NYSE: <a class="ticker" href="/stock/lemb#NYSE">LEMB</a>) and the actively managed WisdomTree Emerging Markets Local Debt Fund (NYSE: <a class="ticker" href="/stock/eld#NYSE">ELD</a>).

Local currency debt accounted for 85 percent of the total emerging markets bond market in 2011, <a href="http://www.ft.com/intl/cms/s/0/56cb690e-c6a8-11e1-963a-00144feabdc0.html#axzz2GHTHV0sG">according to the Financial Times</a> and investor interest in local currency bonds continues to increase as some developing nations sport better balance sheets than their developed world counterparts.

Local currency bond ETFs have also held up well in the face of the fiscal cliff. Led by EMLC's 2.33 percent gain, all three of the local currency bond funds mentioned here are up since November 7.

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

EELV

EEMV

Market Vectors Emerging Markets Local Currency Bond ETF

EMLC

LEMB

SPHD

PowerShares S&P 500 Low Volatility Portfolio

SPLV

How to Play 2013's Top ETF Trends

One of the biggest themes in the ETF universe in 2012 has been the impressive accumulation of assets by bond funds. Through the first 10 months of 2012, all bond ETFs, U.S-listed and those trading outside the U.S., raked in $114 billion in new assets. 

U.S. funds did the bulk of the work, attracting $52.8 billion through the end of October, <a href="http://eng.fundsamericas.com/news/etf/9714/Equity-ETF-and-ETP-Investors-Increase-Exposure-to-Emerging-Markets-6-Fold-in-2012?goback=.gde_110203_member_193543466">according to Funds America</a>. That means bond funds are 2012's top asset gatherers among ETFs, putting the asset class well ahead of the almost $36.7 billion hauled in by U.S.-listed emerging markets ETFs.

With fears of the fiscal cliff high and expectations from some market observers that 2013 could be another bumpy year for stocks, it is reasonable to expect bond ETFs as a group will remain proficient at gathering assets. These 10 bond ETFs could help investors weather potential storms while generating income in the year ahead. In no particular order...

PIMCO Total Return ETF (NYSE: <a class="ticker" href="/stock/bond#NYSE">BOND</a>)
Perhaps the worst thing that can be said of the PIMCO Total Return ETF, colloquially known as the "Bill Gross ETF," is that the fund's success is not surprising. Really, did anyone expect an ETF with the bond king's name attached to it to be a flop? 

A flop BOND is not. Since its February 29 inception date, BOND has accumulated <a href="http://www.pimcoetfs.com/Funds/Pages/BOND.aspx">$3.83 billion in assets under management</a>, making it the largest actively managed ETF by a wide margin. More important that superficial statistic is performance. BOND has delivered the goods there as well as the ETF has gained nearly 12 percent since its debut..

iShares Core Total U.S. Bond Market ETF (NYSE: <a class="ticker" href="/stock/agg#NYSE">AGG</a>)
The iShares Core Total U.S. Bond Market ETF, previously the iShares Barclays Aggregate Bond Fund, makes this list for fans of ETF competition. Not only does the fund offer investors a passively managed equivalent to BOND, it is locked in a serious battle with the Vanguard Total Bond Market ETF (NYSE: <a class="ticker" href="/stock/bnd#NYSE">BND</a>).

In fact, it is BND's paltry expense ratio of 0.1 percent that likely prompted AGG's own fee reduction to 0.08 percent. Whether or not Vanguard responds and cuts BND's fees next year remains to be seen. Also interesting will be whether or not investors embrace the low fees of AGG and BND over the allure of BOND's active management. The PIMCO offering charges 0.55 percent per year.

PowerShares Emerging Markets Sovereign Debt Portfolio (NYSE: <a class="ticker" href="/stock/pcy#NYSE">PCY</a>)
If surging bond ETF inflows represent a theme, then a sub-theme is soaring assets under management totals for emerging markets debt funds. That theme <a href="http://www.benzinga.com/markets/bonds/12/12/3156036/seasonal-trends-for-em-bonds">has been obvious throughout 2012</a> and the PowerShares Emerging Markets Sovereign Debt Portfolio has been a prime beneficiary.

Not only is PCY large with over $3 billion in AUM, it is a compelling option for income for investors for several reasons. First, is the 30-day SEC yield almost four percent. Second, is the monthly dividend. Third, most of PCY's holdings are rated investment grade, so investors are not taking on significant credit risk with this fund. 

Market Vectors Emerging Markets Local Currency Bond ETF (NYSE: <a class="ticker" href="/stock/emlc#NYSE">EMLC</a>)
Sticking with the theme of emerging markets bond ETFs, EMLC represents a fine option for the investor looking to gain exposure to non-dollar asset classes. EMLC and rival funds have shown investors <a href="http://www.benzinga.com/markets/bonds/12/12/3154114/local-currency-em-bonds-face-the-fiscal-cliff">improving credit quality and health balance sheets</a> in the emerging world can translate to solid returns.

EMLC, the WisdomTree Emerging Markets Local Debt Fund (NYSE: <a class="ticker" href="/stock/eld#NYSE">ELD</a>) and the iShares Emerging Markets Local Currency Bond Fund (NYSE: <a class="ticker" href="/stock/lemb#NYSE">LEMB</a>) have all traded noticeably higher in 2012. All three have been prodigious gainers of new assets. If 2013 turns out to be a risk on year, those trends should continue for these ETFs.

SPDR Barclays Capital High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/jnk#NYSE">JNK</a>)
Just some folks writing off junk bond ETFs, JNK and rivals such as the iShares iBoxx $ High Yield Corporate Bond Fund (NYSE: <a class="ticker" href="/stock/hyg#NYSE">HYG</a>) look to be closing 2012 on a strong note and are flirting with 52-week highs. HYG and JNK are favorite tools for gauging risk appetite because some pros view these ETFs as trading in comparable fashion to stocks.

Savvy traders keep an eye on JNK because its tracking error relative to its index is looser (worse) than HYG's. That means in lieu of a heavily traded inverse junk bond ETF (there is one, though it is thinly traded), traders that want to short junk bonds often short JNK.

Market Vectors International High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/ihy#NYSE">IHY</a>)
If there is superficial problem with HYG and JNK it is that those are the only high-yield bond ETFs the mainstream financial press pays attention to. The derivative problem is that by using HYG and JNK as the indicators for the broader junk bond ETF world, <a href="http://www.benzinga.com/markets/bonds/12/12/3144876/following-redemptions-junk-bond-etfs-at-multi-week-highs">compelling funds go ignored</a>.

The Market Vectors International High Yield Bond ETF is one such fund. When folks were crowing about outflows from HYG and JNK, they were also ignoring one of 2012's better asset-gathering stories. IHY debuted in April and now has almost $202 million in AUM. IHY has also gained more than eight percent since its debut. Anything close to those AUM and performance numbers in 2013 would make for a very successful sophomore year.

Vanguard Short-Term Inflation-Protected Securities Index ETF (NYSE: <a class="ticker" href="/stock/vtip#NYSE">VTIP</a>)
Speaking of ETFs to watch in their sophomore seasons, VTIP merits consideration. The fund debuted in October as Vanguard's first foray into the short-term TIPS market. Since there are scores of TIPS ETFs out there, VTIP encroached on someone else's territory. The iShares Barclays 0-5 Year TIPS Bond Fund (NYSE: <a class="ticker" href="/stock/stip#NYSE">STIP</a>) is one example. Again, this tussle could come down to fees. VTIP charges 0.1% per year, just half of what STIP charges. 

Market Vectors High-Yield Muni ETF (NYSE: <a class="ticker" href="/stock/hyd#NYSE">HYD</a>)
Municipal bonds defied conventional wisdom in 2012. Early in the year, there was plenty of chatter regarding an increased number of municipal defaults. That chatter proved accurate and there is no getting around the fact that plenty of states, including large ones such as California and Illinois, are not in the best fiscal health.

Investors shrugged off those concerns to send <a href="http://www.benzinga.com/markets/bonds/12/11/3135673/muni-bond-etfs-jump-to-new-highs-on-cliff-fears">muni bond ETFs soaring</a>. Moreover, investors have shown little reluctance about embracing high-yield muni fare. HYD has performed like a high-beta stock, jumping nearly 18 percent to this point in 2012 while crossing the $1 billion in AUM level. 

HYD and its brethren face some important issues in 2013. First, will the tax treatment of muni bonds change for the worse as politicians seek to generate much-needed revenue? Second, for how long will investors keep ignoring municipal defaults as they hunt for yield?

WisdomTree Emerging Markets Corporate Bond Fund (NASDAQ: <a class="ticker" href="/stock/emcb#NASDAQ">EMCB</a>)
In a year when BOND, and rightfully so, has commanded most of the positive headlines relating to new bond ETFs, it has been hard for other funds to standout. However, the WisdomTree Emerging Markets Corporate Bond Fund has been a standout in its own. Bringing in almost $96 million in just 10 months of trading says as much.

Until recently, emerging markets corporate debt has not been the first destination investors think about when evaluating ex-U.S. bond options. There are signs that is starting to change amid increased issuance of these bonds and high premiums investors are forced to pay on emerging markets sovereign issues. 

For those that think EMCB's concept is too narrow or opaque, think again. The ETF has, in a way, been validated by the appearance of <a href="http://www.benzinga.com/stock-articles/emcb/all">not one, but two competitors</a>.

PowerShares Senior Loan Portfolio (NYSE: <a class="ticker" href="/stock/bkln#NYSE">BKLN</a>)
The PowerShares Senior Loan Portfolio, the first ETF to bring senior loans to the masses, has enjoyed an excellent 2012. BKLN is up 9.2 percent and while that lags the performance of HYG and JNK, it is worth noting BKLN's volatility is substantially lower than those rival high-yield funds.

BKLN's success has been a direct result of investors searching for yield and that success if proven by the fund's rapid accumulation of assets. In July, BKLN had $583 million in AUM, but that <a href="http://www.benzinga.com/markets/bonds/12/10/2976126/bank-loan-etf-going-strong">number jumped to $880 million by late September</a> and then over $1 billion by early October. As of December 7, BKLN was home to more than $1.4 billion in AUM.

As a high-yield fund, BKLN is a worthwhile risk appetite gauge and that validates it as a bond ETF to watch in 2013. What will also be interesting is that 2013 will be BKLN's first full trading year with a year competitor. The Pyxis/iBoxx Senior Loan ETF (NYSE: <a class="ticker" href="/stock/snln#NYSE">SNLN</a>) debuted in early November.

For more on bond ETFs, click <a href="http://www.benzinga.com/markets/bonds">here</a>.

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Econ #s

After-Hours Center

BKLN

Market Vectors High Yield Municipal Index ETF

SNLN

STIP

VTIP

10 For '13: Bond ETFs For The New Year 

As U.S. equities falter following the results of Tuesday's presidential election, one of this year's most popular asset classes is proving quite study: Emerging markets bonds. Specifically, the ETFs that track dollar-denominated corporate and sovereign developing markets debt are holding up nicely relative to stocks and other riskier assets.

One obvious reason for this is low correlations to U.S. equities. As Benzinga <a href="http://www.benzinga.com/markets/bonds/12/11/3062454/for-a-post-election-risk-on-rally-buy-these-etfs">reported on Tuesday</a>, the PowerShares Emerging Markets Sovereign Debt Portfolio (NYSE: <a class="ticker" href="/stock/pcy#NYSE">PCY</a>) has a three-year correlation to the SPDR S&amp;P 500 (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>) of just 0.69.

PCY, which has over $2.8 billion in assets under management, is modestly higher today. So is the $6.2 billion iShares J.P. Morgan USD Emerging Markets Bond Fund (NYSE: <a class="ticker" href="/stock/emb#NYSE">EMB</a>). Both feature dollar-denominated sovereign debt issued by developing nations. 

The two have been among the most impressive gatherers of assets in the ETF universe this year. Just six weeks ago, <a href="http://www.benzinga.com/markets/bonds/12/09/2905122/5-etfs-with-surging-aum-totals">PCY had $2.25 billion in AUM</a>.

ETFs that offer exposure to emerging markets corporates are also holding up well today. The WisdomTree Emerging Markets Corporate Bond Fund (NASDAQ: <a class="ticker" href="/stock/emcb#NASDAQ">EMCB</a>), the largest ETF offering exposure to emerging markets coprorates, was found near its highs of the day at just after 2 p.m. Eastern time. Actively managed, EMCB has proven to be one of 2012's most successful new ETFs as investors have sought alternative avenues for generating income.

The growth of the emerging markets corporate bond space could bolster the bull case for EMCB and rival funds going forward. As <a href="http://www.benzinga.com/analyst-ratings/analyst-color/12/10/3043478/pimco-bullish-on-em-corporate-bonds">PIMCO recently noted</a>, "the stock of EM corporate bonds outstanding has grown to around $1 trillion, dwarfing that of EM sovereigns at $680 billion."

Some of the funds that feature bonds denominated in local currencies are, at the very least, performing less bad than U.S. stocks today. The WisdomTree Emerging Markets Local Debt Fund (NYSE: <a class="ticker" href="/stock/eld#NYSE">ELD</a>), the second-largest actively managed ETF, is unchanged. ELD's cousin, the WisdomTree Asia Local Debt Fund (NYSE: <a class="ticker" href="/stock/ald#NYSE">ALD</a>), modestly higher.

The iShares Emerging Markets Local Currency Bond Fund (NYSE: <a class="ticker" href="/stock/lemb#NYSE">LEMB</a>) and the Market Vectors EM Local Currency Bond ETF (NYSE: <a class="ticker" href="/stock/emlc#NYSE">EMLC</a>) are both down slightly. LEMB has $207.5 million in AUM while EMLC has over $1 billion in assets.

For more on emerging markets bonds, click <a href="http://www.benzinga.com/analyst-ratings/analyst-color/12/10/3043478/pimco-bullish-on-em-corporate-bonds">here</a>.

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WisdomTree Emerging Markets Corporate Bond Fund

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