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Emerging market bonds a rising star for risk-takers

US investors with higher risk appetite drawn to the high yield and returns.

IT has been nearly two years since the Federal Reserve began to raise its core interest rate, yet income investors in the United States are waiting for a tail wind to kick in.

Those who are willing to bear additional risk might turbocharge their returns with emerging market bond funds, an often ignored slice of the fixed income sector that lately has delivered a combination of high yield and high total returns.

The iShares JP Morgan USD Emerging Markets Bond, for example, pays a 4.5 per cent yield and delivered a total return of more than 9 per cent through the first nine months of the year.

By comparison, the iShares Core US Aggregate Bond ETF, an exchange-traded fund that invests in a broad slice...

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