Wednesday 16 January 2013

Portfolio Buy: SPDR Barclays Emerging Markets Local Bond UCITS ETF (LSE:EMDD)

A toe in the water, so to speak.

To match the recently-purchased 'Emerging Markets' dividend ETF, I have bought an equivalent fixed-income ETF - one which invests in the 'liquid local currency emerging markets debt market'.

The SPDR Barclays Emerging Markets Local Bond UCITS ETF, is an open-end, UCITS-compliant (EU standard) Exchange Traded Fund, domiciled in Ireland and managed by State Street. This ETF tracks the Barclays Emerging Markets Local Currency Liquid Government Index as closely as possible.

This ETF is priced in US$ on the LSE, making my portfolio spreadsheet calculations just that little bit more complicated. The managers claim a current yield is over 8% (with a yield-to-maturity of nearly 5%) but the actual yield of the holding is only around 4.7% based on the US$ payments - which are a bit difficult to find on the SPDR website. Why this is so much less than the yield on the holdings is an open question. The distribution of income is semi-annual.

The top holdings are things like:
  • BLTN 0 01/01/14
  • RFLB 8.15 02/03/27
  • MBONO 6 06/18/15
(Answers on a postcard, please...)

The Total Expense Ratio is 0.55% but when you look at the range of obscure securities the ETF follows, this looks like value for money for a DIY Income Investor.

[Purchase price: $64.34]

I am not a financial adviser and the information provided does not constitute financial advice. You should always do your own research on top of what you learn here to ensure that it's right for your specific circumstances.

1 comment:

  1. It seems to be quoted in US Dlrs EMDD and Sterling EMDL - if you paid 64 you probably bought the Sterling version.

    Richard - Wimbledon