It is a passive bond ETF that tracks an index of corporate bonds issued in US dollars by emerging market companies. Because the bonds are denominated in dollars, the fund is exposed more to the credit quality of emerging market companies and to global interest rates than to exchange rates, and it seeks interest income.

It suits investors who want to diversify into emerging market corporate bonds on a dollar basis and are willing to accept emerging market credit risk.

The ETF is managed by iShares using a passive (index-tracking) approach.

The fund tracks an index of corporate bonds issued in US dollars by emerging market companies. Because the bonds are dollar-denominated, local currency risk is reduced, but the fund is exposed to the credit quality of emerging market companies, global interest rates, and the emerging market risk environment. It is structured to provide emerging market credit exposure spread across many emerging market issuers.

• Exposure to dollar-denominated emerging market corporate bonds
• Emerging market credit with reduced local currency risk

Assets under management (AUM) stand at $397.6M, and the expense ratio is 0.50% per year.

Compared with the US corporate bond ETFs LQD and USIG, the main points of comparison are investment region and emerging market credit exposure.

Emerging market dollar corporate bonds are driven by global interest rates, credit spreads, the emerging market risk environment, and the strength of the dollar. They tend to perform well when risk appetite improves and to weaken as spreads widen when risk aversion grows. Credit and political risks are generally higher than for US corporate bonds.

Fund flows into emerging market corporate bonds diverge depending on global risk appetite, the interest rate outlook, and conditions in emerging markets, and capital sometimes shifts into emerging market bonds when risk appetite improves. It is also worth noting that performance varies with the emerging market credit environment and the direction of the dollar.

Its strengths are emerging market credit exposure and reduced currency risk thanks to dollar denomination, while credit and political risks, global interest rates, and sensitivity to risk aversion are factors to consider.

For exposure to emerging market government bonds, direct alternatives include EMB and PCY, and for a different emerging market government bond strategy, products such as VWOB are also worth comparing. For a focus on emerging market high yield, products such as EMHY can also be considered. The three products shown in the table, LQD, USIG, and USHY, all invest in US corporate bonds, so their investment region and credit exposure differ. This ETF's distinguishing factor is its narrower exposure to dollar-denominated emerging market corporate bonds.

These are the points to review before investing in CEMB. Emerging market corporate bond exposure is the main attraction, but credit and political risks, global interest rates, and sensitivity to risk aversion should be checked in advance. It is also a good idea to compare it with emerging market government bond and US corporate bond products.

The credit risk of emerging market companies, political risk in each country, and spread widening driven by global risk aversion are the main variables for short-term performance, and even with dollar denomination, prices can come under pressure when US interest rates rise. Emerging market corporate bonds tend to be more volatile than their developed market counterparts.

This is a suitable candidate for investors who want to diversify into emerging market corporate bonds on a dollar basis. For exposure to emerging market government bonds, consider products such as EMB and PCY, and for exposure to dollar-denominated emerging market corporate bonds, it is advisable to compare this product alongside them before choosing.