Emerging Market Bond Funds

by Minority Fortune

Emerging Market funds have been producing remarkable returns this year considering the market. However, volatility is the price one pays when participating in the market. That’s why bundling your higher risk funds and stocks with bonds may be a smart move. An article in the December 2009 Black Enterprise Magazine suggested that one should consider emerging market bond funds for less volatility. An additional perk that they hold is that they still deliver in profits.

The traditional rules should apply when allocating bonds in your portfolio. One should hold a conservative mix of bonds or bond funds with their stocks. However, it’s understandable to increase bond holding during rocky economic times. Legendary investor Benjamin Graham advised that it’s acceptable to have between 25-75% of bonds infused in proportion to the market conditions.

The BE article went on to report that the average of emerging market bond funds had an annualized return of 10.74%. That’s one sexy return. Yet, one should mix these bond funds with a mix of ETFs and stocks for more aggressive returns.

Here’s Black Enterprise’s List of Top Performing Emerging Market Bond Funds

Fund – 5Yr Return – Min Investment – Expense Ratio
• Fidelity Advisor Emerging Markets Income (FMKIX) – 10.44% -$2500 – 0.95
• Fidelity New Markets Income (FNMIX) – 10.25% – $2500 – 0.90
• MFS Emerging Markets Debt (MEDIX) – 10.18% – $0 – 1.06
• T. Rowe Price Emerging Markets Bond (PREMX) – 9.95% – $2500 – 0.98
• Goldman Sachs Emerging Market Debt (GSDAX) – 9.59% – $1000 – 1.22

*Note funds reflect returns up to Sept. 30, 2009.

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