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Investors are returning to the bond market in force, driving fixed-income ETFs toward another record year as higher yields make bonds attractive for income-seeking investors once again.
Roughly six months ago, our December 2025 piece flagged Vanguard Emerging Markets Government Bond Index Fund ETF Shares (NASDAQ: VWOB) as an overlooked monthly-income play for retirees, highlighting a roughly 5.7% yield, monthly distributions near $0.32 per share, and a surprise 13.5% capital gain in 2025.
The iShares J.P. Morgan USD Emerging Markets Bond ETF (NASDAQ:EMB | EMB Price Prediction) is the default vehicle for retirees and income investors seeking higher coupons than U.S.
Fixed income continues to sell off across Europe which focuses investors' minds on UK April inflation. Crude prices slip on news that several tankers were able to exit the Strait of Hormuz.
Japanese investors became net sellers of foreign stocks in April for the first time in four months, as concerns over rising energy costs linked to the Iran war and broader inflation risks weighed on sentiment toward overseas equities. Data released by Japan's Ministry of Finance on Wednesday showed that investors sold a net 636.4 billion yen ($4.04 billion) worth of foreign stocks during the month.
The Invesco Emerging Markets Sovereign Debt ETF (NYSEARCA:PCY) has quietly become one of the better-performing fixed income vehicles of the past year, returning 16% over the trailing twelve months as the Federal Reserve cut its policy rate by 75 basis points and risk appetite returned.
The iShares J.P. Morgan USD Emerging Markets Bond ETF (NASDAQ:EMB | EMB Price Prediction) closed at around $96 today, capping a 12% total return over the past year and a quieter 1% gain year to date.
Investors may be better off looking outside the world's core bond markets right now, Brij Khurana writes in a guest commentary.