what is the emerging markets bond index embi 
the emerging markets bond index embi is a benchmark index for measuring the total return performance of international government and corporate bonds issued by emerging market countries that meet specific liquidity and structural requirements despite their increased riskiness relative to developed markets emerging market bonds offer several potential benefits such as portfolio diversity as their returns are not closely correlated to traditional asset classes understanding the emerging markets bond indexan emerging market describes a developing country or economy that is progressing toward becoming more advanced by rapidly industrializing and adopting free market economies the largest emerging markets include nigeria china india brazil south africa poland mexico turkey argentina russia etc to take advantage of the rapid growth occurring in these countries investors look to bonds issued by the government of these nations emerging market debt or bonds are considered sovereign debt these government bonds are typically issued in foreign currencies either in us dollars euros or japanese yen because of the increased economic and political risk present in these countries the credit rating on emerging market bonds tend to be lower than that on developed market bonds due to the perceived higher risk of investing in these assets the sovereign bonds have higher yields for investors than that of more stable bonds in developed countries for example the pimco emerging local bond fund delivered a total return of more than 14 in the first nine months of 2017 while the ishares core us aggregate bond etf gained 3 1 during the same time period investors who want exposure to emerging economies and who are willing to take on additional risk typically do so through mutual funds or exchange traded funds etfs that track the performance of a benchmark index such as the emerging markets bond index 