Emerging Market Dollar Bond ETF Draws Biggest Haul Since 2023

Investors are gravitating to dollar bonds to ride the rally in emerging-markets, and have poured the most money in two years into a fund tracking the asset class.

BlackRock Inc.’s iShares JPMorgan USD EM Bond ETF, the largest US exchange-traded fund for EM sovereign and corporate dollar bonds, as pulled in $2.1 billion in the past five weeks, the most since December 2023, according to data compiled by Bloomberg. The $16.7 billion fund has soared some 8% this year, the best annual performance since 2019.

While money managers are optimistic on emerging markets as a whole, dollar bonds are turning out to be a favored trade. PineBridge Investments is one of those bulls. The asset manager said earlier this month that it expects the rally to tilt in favor of fixed income and away from currencies.

“Investors are coming out of 2025 with a higher level of comfort in emerging markets helped by strong returns in sovereign bonds,” said Anders Faergemann, the head of emerging-market sovereigns at PineBridge in London. “Inflows into the asset class could be a game changer and we will be paying more attention to that aspect relative to other factors.”

Lower market volatility is been a big reason why hard-currency bond gained in the second half of 2025, Faergemann said.

As a result of the rally, the extra yield that investors demand to own EM sovereign dollar bonds over Treasuries has fallen to the lowest in 11 years.