State Street DoubleLine Emerging Markets Fixed Income ETF (EMTL) seeks to provide income and capital appreciation through active management of emerging markets debt securities. The fund invests in government and corporate bonds from developing countries, focusing on local currency and dollar-denominated debt across Latin America, Asia, Eastern Europe, and Africa.
How It Works
EMTL employs an actively managed approach led by DoubleLine's fixed income team, utilizing fundamental credit analysis and macroeconomic research to select bonds across emerging market countries. The fund can invest in both hard currency (USD-denominated) and local currency bonds, with flexibility to adjust duration and credit quality based on market conditions. Portfolio construction emphasizes risk-adjusted returns through diversification across countries, currencies, and credit sectors, with regular rebalancing based on changing economic fundamentals.
Key Features
- Active management by DoubleLine's experienced emerging markets team allows tactical positioning across countries and currencies
- Flexible mandate to invest in both hard currency and local currency bonds optimizes risk-return profile
- 4.27% dividend yield provides attractive income potential from emerging markets debt securities
Risks
- This ETF can lose value when emerging market currencies weaken against the dollar, potentially reducing returns by 10-20% during crisis periods
- Credit risk exposure means bond defaults or downgrades in developing countries could cause permanent capital losses of 5-15%
- Interest rate sensitivity means rising U.S. rates typically cause emerging market bond prices to decline significantly
Who Should Own This
Best suited for income-focused investors with medium-to-high risk tolerance and 3-5 year time horizons seeking emerging markets fixed income exposure. Appropriate as a satellite holding representing 5-15% of a diversified bond portfolio. Requires comfort with currency volatility and developing market political risks in exchange for higher yield potential.