It is an actively managed bond ETF that invests in government and corporate bonds issued by emerging market countries. Rather than replicating a specific index, the management team builds the portfolio by selecting countries, currencies, maturities, and credit ratings at its own discretion.

It suits diversification-minded investors who want higher interest income than developed market bonds offer and are willing to accept emerging market credit and currency volatility.

It is an ETF run by VanEck using an active management approach.

The fund selects and holds bonds issued by emerging market governments and companies, in both US dollar denominated hard currency and local currency. The management team adjusts weightings based on each country's macroeconomic conditions and its outlook for credit, interest rates, and currencies. Because of its active management, the fee is somewhat higher than that of passive bond ETFs.

• Flexible management using both hard currency and local currency bonds
• Active security selection without tracking an index

Assets under management (AUM) stand at $294.1M, and the total expense ratio is 0.65% per year.

The fee is somewhat higher than that of passive emerging market bond ETFs, but the fund stands out for its ability to respond to market conditions at the management team's discretion.

Emerging market bond returns tend to be highly volatile, depending on the direction of US interest rates, the strength of the dollar, and emerging market credit spreads. Recent performance has also moved up and down with the global interest rate environment and risk appetite.

Emerging market bonds are used as a diversification target by investors seeking relatively higher interest income than developed markets offer. Funds tend to flow out of local currency assets when the dollar is strong, and to flow back in when risk appetite recovers.

Its strengths are high interest income and flexible active management, while its weaknesses are credit and currency volatility and a relatively high fee.

Direct comparisons in the same emerging market bond category include EMB and PCY, which invest in US dollar denominated emerging market government bonds. These are passive products that track an index and tend to have lower fees. For local currency exposure, you can also consider EMLC from the same issuer, VanEck, and for broad diversification, VWOB. Unlike these products, this fund is an active product that blends hard currency and local currency at the management team's discretion. BNDX, IUSB, and others that appear in the comparison table are broad bond funds with a large developed market weighting and tend to have low fees, while BINC, PYLD, JCPB, and others are multi-sector products that invest actively across several bond sectors, with fee levels close to those of active management.

Here are the points to review before investing in EMBX. Emerging market bonds tend to offer high interest income but come with credit, currency, and interest rate risks, so it is important to check the fee, whether currency hedging is applied, and the credit distribution in advance.

If wider emerging market credit spreads, weaker local currencies, and rising interest rates in major economies occur at the same time, price declines could be larger. Volatility may stand out when risk appetite contracts.

It is a suitable diversification tool for investors who want higher interest income than developed market bonds and active management. If cost and passive exposure are your priority, we recommend comparing EMB, PCY, and similar funds, and if you want local currency exposure, comparing EMLC and similar funds before you choose.