Emerging market bonds

Emerging market bonds are those issued by governments and companies based in emerging economies. Funds in this asset class are split into three categories: those whose underlying bonds are issued in local currencies, those whose bonds are issued in ‘hard currencies*’ and those that have a blend of both. Emerging market bonds are deemed to be of higher risk and, therefore, the yield on these bonds tends to be higher to compensate investors.*Hard currencies include: Australian dollars, Canadian dollars, Swiss francs, Danish krone, Euros, Sterling, Japanese yen, Norwegian krone, Swedish krona and US dollars.