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Kick-return for the depot


Verkehrte Welt: NIcht nur griechische Anleihen kamen zuletzt unter die Räder, oftmals sind sogenannte entwickelte Länder höher verschuldet als Schwellenländer. Wie Anleger in Schwellenländer investieren können. Quelle: dpa

Topsy-turvy world: not only Greek bonds were modified under the wheels, so-called developed countries are often higher than emerging markets debt. How investors can invest in emerging markets. Source: AP

HB. Decades of government bonds from emerging markets were indeed as high rates of return, but also very risky. But times change, the emerging markets get on – not only economically. The emerging financial markets are gaining importance in the bond business. When shares are becoming essential for emerging from the depots of the investors, investors discover the bonds now. For interest rate instruments from India, Venezuela and Brazil offer above-average returns. Ten-year government bonds currently pay just over three percent, while bonds from emerging markets often offer seven to nine percent.

For bonds from emerging markets is the fact that the economic recovery and the raw material wealth of the emerging nations in Asia and Latin America bring not only companies increasing profits, even the states will benefit. The creditworthiness of many emerging markets has improved massively. Thus, the credit quality of various emerging market countries like Brazil, Colombia, Malaysia, South Africa and Tunisia now is assessed by the rating agencies with investment-grade range. This means that even large pension funds may increasingly invest in bonds of those countries.

Established debtor under pressure

The comparison with the developed countries must no longer fear the emerging markets. For the creditworthiness of borrowers suffering from increasingly well-established titles. Not only Greek bonds were modified under the wheels, other weaker countries in the euro zone such as Spain, Ireland and Portugal are not more investors than prime borrowers. "Currency crashes, a short-lived and debt-financed growth, weak domestic demand, excessive fiscal deficits and political uncertainty were once primarily characteristics of the emerging markets," Brett Diment, an expert in emerging debt fund company in the Aberdeen writes in a market comment. "Today, even the familiar attributes of the so called developed countries."

Emerging markets are not as heavily as many developed countries, most recently emphasized the German bank Research. Estimates of the International Monetary Fund to the debt of the G7 countries soon climbs aufmehr than 100 percent of gross domestic product (GDP). The emerging countries now have a lower debt load of only 40 percent of GDP.

In addition, there have in recent years, serious bond market develops. The interest of investors has driven the issue of government bonds from emerging markets to record highs. According to calculations by the market research from Dealogic, the volume of bonds in the past year has doubled to around € 80 billion, almost. This positive trend continues. At the same time, the risk premiums demanded by investors has declined considerably. Was the premium over U.S. Treasury bonds end of the 1990s still almost 17 percent, he is now fallen below three percent. Some emerging countries may be cheaper to refinance than the ailing euro-member Greece.

Emerging market bonds were recommended last time and again Depot incorporation: The experts of the world’s largest bond trader Pimco, a U.S. subsidiary of Allianz, advise their customers now, rather in emerging markets such as investment in British government bonds. The Swiss bank UBS encourages customers to invest their money more in the emerging markets and restraint in government bonds in developed countries.

However, investors should not underestimate the risks of emerging markets. Experts advise to diversify the involvement in such papers to keep the (default) risk to a minimum. The Ishares JP Morgan $ Emerging Markets Bond Fund investors can invest in a portfolio of bonds from emerging countries. Ishares launched the ETF in February 2008. Since then, the fund posted a gain of 18.75 percent (as of April 22), while the index took it on 20.38 percent. At sight of one year, investors earned on euro-based ETF with 23.90 percent in the past three months, more than ten percent. Since 17 March is also the paper on the Deutsche Börse noted.

Widely diversified investing

The ETF invests directly in the securities imJPMorgan Emerging Markets Bond Global Diversified Index. The index provides access to U.S. dollar denominated government bonds and bonds, government bonds are similar – in accordance with the Fund Currency U.S. dollar. Investors from the euro area must therefore keep an eye on the currency risk – the dollar rises or falls, which affects the yield either positive or negative.

The index contains only bonds with a maturity of at least two years and an outstanding volume of at least one billion U.S. dollars. With a modified duration of about 6.95 percent interest rate risk is currently quite high. Currently, the average coupon is 7.1 percent, the remaining term of the bonds in the fund is, according to Ishares 13.6 years.

The ETF contains 61 values. The highest are weighted according to Ishares bonds from Brazil, which account for 10.08 percent of the portfolio, followed by Russia with 9.23 percent and Turkey with a share of 8.21 percent. Permits are also strongly represented in the Philippines (7.28 percent), Mexico (7.11 percent) and Venezuela (5.92 percent). The fact that Bonds from the United States, the Netherlands and Luxembourg are included, confused at first glance. "We point to our fact sheets that? Country of Incorporation? And not that? Country of Risk?" Said Marc Bubeck of Ishares. "This means that countries like the Netherlands or the United States are reported, although the bonds actually from Kazakhstan, Indonesia, Russia and Mexico come from." The yields of the ETFs are distributed monthly. The annual fees are 0.45 percent and the maximum spread of three percent.

No clear definition of the emerging

Emerging markets are still traditionally counted among the developing countries, although they are no longer the typical structure characteristics. This includes countries like South Africa, Brazil, Thailand, Malaysia or Ethiopia, which begins in the industrialization straight or already is advanced. The economic structures are already largely rebuilt, the country is on its way to industrialization of the agricultural economy. Emerging markets are generally characterized by a strong contrast between poor and rich. There is often tension between conservative forces and the parties who want to achieve modernization.

Which countries to include emerging economies, is not clearly defined. In recent years, for example by the World Bank, OECD and the International Monetary Fund (IMF) lists created with economies in transition. There is no binding list, it is not. The number of emerging nations varies depending on the list of between ten and 30 It is a political decision as to whether a country is a country in transition. Generally, measurable and accepted standards are lacking. The World Bank categorizes 46 countries, the International Monetary Fund (IMF) lists 149 countries as emerging economies.