Non trovato

six

@six

6Mes·

$VEMT (+0,3%)

Hello everyone,

I'm actually a bit surprised that you haven't read anything about this ETF here yet.

I'm thinking about adding it to my portfolio.

Please write your opinion on the ETF in the comments.

Advantages:

Different asset class (EM government bonds)
Monthly distribution
Distribution yield approx. 5.65%
Should actually rise when interest rates fall again

Disadvantages:

Currency risk
No price rocket

Here is another article by Gerd Kommer on the subject of emerging market government bonds

https://gerd-kommer.de/schwellenlaender-staatsanleihen/

gerd-kommer.deSchwellenländer-Staatsanleihen – eine bedenkenswerte Asset-Klasse?

7 Commenti

NEWT@SteelAnacott

6Mes

Based on the article and my own additional research, I had an EM Bonds ETF in my portfolio for almost three years. In short, it performed rather poorly. Performance +/- 0, including dividends. That's why I sold it and preferred to switch to equity ETFs and individual shares.
You could say that I chose a bad time period and that three years' performance is not meaningful enough for an ETF, but I feel better about my decision and the performance of the investments in which I reallocated the capital is also better.

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six@six

6Mes

@SteelAnacott Well, the last few years have also been down because of rising interest rates (or did you have it before that time?).
I think now would actually be a good time to get in.

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NEWT@SteelAnacott

6Mes

@six I had it before and during. The period was certainly not the best. Maybe I'll take another look at the subject. The data in the article speaks for itself. However, I don't want to increase my portfolio to too many positions. That's why I pay attention to what I take on.

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Nico@itZNico

6Mes

I've had it for about two years. I also read the report about the 5.8% p.a. in 201 years before I bought it. It's not a price rocket, but I'm pleased with the regular distributions and also expect the price to rise again when interest rates fall.

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six@six

6Mes

@itZNico Do you buy regularly (savings plan?) or was it a one-off investment?

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Nico@itZNico

6Mes

I will buy regularly again according to a savings plan. But at the moment I need to save for something else bigger. 🏠

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Giampiero B.@GiampieroB

$VEMT aims to replicate the performance of the Bloomberg USD Emerging Markets Government RIC Capped Index, offering exposure to U.S. dollar-denominated government bonds from emerging market countries.

Strengths

1. Diversification: By investing in a broad range of government bonds from various emerging markets, VEMT provides investors with diversified exposure, potentially reducing the impact of country-specific risks.

2. Cost-Effective: VEMT boasts a low expense ratio, making it an attractive option for cost-conscious investors seeking exposure to emerging market debt.

3. Liquidity: As an ETF, VEMT offers the advantage of intraday trading, allowing investors to enter and exit positions throughout the trading day, which can be beneficial in volatile markets.

Weaknesses

1. Interest Rate Sensitivity: Emerging market bonds can be sensitive to interest rate fluctuations, especially in the U.S. Rising U.S. interest rates may lead to capital outflows from emerging markets, negatively impacting bond prices.

2. Credit Risk: Investing in government bonds from emerging markets entails credit risk, as these countries may face economic or political challenges that could affect their ability to meet debt obligations.

3. Currency Risk: Although VEMT invests in USD-denominated bonds, the economic stability of the issuing countries can influence currency exchange rates, indirectly affecting bond performance.

Conclusion

VEMT offers a cost-effective and diversified avenue for investors to access emerging market government bonds. However, it's essential to consider the associated risks, including interest rate sensitivity, credit risk, and indirect currency exposure. As always, aligning investment choices with individual risk tolerance and financial objectives is crucial.

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