iShares $JPM $USD Emerging Markets #Bond ETF. The fund tracks an index of US-dollar-denominated sovereign debt issued by emerging-market countries with more than $1B outstanding and at least two years remaining in maturity.
Today the EMB 3/17 86P in large size were opened today...
Currency risk: Betting against the debt of a country with a currency that is likely to depreciate relative to the US dollar can be a way to hedge against currency risk. If the value of the local currency drops, the US-dollar-denominated debt becomes more expensive to repay, which could lead to defaults.
Interest rate risk: Emerging-market countries may have higher interest rates compared to developed countries, which increases the cost of servicing the debt. If global interest rates rise, this could make it more difficult for these countries to repay their debt and increase the risk of default.
Refinancing risk: Many emerging-market countries have large amounts of short-term debt that needs to be refinanced regularly. If global financial conditions tighten, it may become more difficult for these countries to secure new financing, increasing the risk of default.
Debt sustainability: Some emerging-market countries may have high levels of debt relative to their economic output, which could increase the risk of default. If their economies are not growing fast enough to generate the revenue needed to repay the debt, this could lead to defaults.
Overall, betting against US-dollar-denominated sovereign debt issued by emerging-market countries involves taking a bearish view on these countries' ability to repay their debt and manage their financial obligations.
Today the EMB 3/17 86P in large size were opened today...
Currency risk: Betting against the debt of a country with a currency that is likely to depreciate relative to the US dollar can be a way to hedge against currency risk. If the value of the local currency drops, the US-dollar-denominated debt becomes more expensive to repay, which could lead to defaults.
Interest rate risk: Emerging-market countries may have higher interest rates compared to developed countries, which increases the cost of servicing the debt. If global interest rates rise, this could make it more difficult for these countries to repay their debt and increase the risk of default.
Refinancing risk: Many emerging-market countries have large amounts of short-term debt that needs to be refinanced regularly. If global financial conditions tighten, it may become more difficult for these countries to secure new financing, increasing the risk of default.
Debt sustainability: Some emerging-market countries may have high levels of debt relative to their economic output, which could increase the risk of default. If their economies are not growing fast enough to generate the revenue needed to repay the debt, this could lead to defaults.
Overall, betting against US-dollar-denominated sovereign debt issued by emerging-market countries involves taking a bearish view on these countries' ability to repay their debt and manage their financial obligations.