Vanguard Emerging Markets Government Bond Index Fund (NASDAQ: VWOB) employs an indexing investment approach designed to track the performance of index. All of the fund’s investments will be selected through the sampling process, and under normal circumstances at least 80% of the fund’s assets will be invested in bonds included in the index. It is non-diversified.
- Category: Emerging Markets Bond
- Fund Family: Vanguard
- Net Assets: 3.4 billion
- NAV: 63.3 billion
- Yield: 5.30%
- Expense Ratio: 0.20%
- Inception Date: 5-31-2013
Investors willing to look outside of the U.S. bond market can also find attractive opportunities. “By investing in emerging market bonds, you’re getting 70% of long-term stock market returns for approximately 55% of stock market risk, as measured by the historical returns and standard deviation of both asset classes,” says Taylor Sohns, co-founder of LifeGoal Investments.
Sohns recommends VWOB, which holds 754 government-issued bonds from countries like China, Mexico, the United Arab Emirates and Turkey. Currently, the ETF has a yield-to-maturity of 7.4%, which is much higher than U.S. government Treasurys with a similar duration.