Friday, February 22, 2013
New Purchase - EMB
I bought 2 shares of EMB to strengthen my fixed income holdings. Prior to this purchase my only bond holdings were in my TSP and the only choice available is US bonds. EMB is an emerging market sovereign debt etf with an allocation listed below:
Fidelity offers 30 commission free iShares ETFs; EMB is one of them. I plan to build this position 1 or 2 shares at a time since it doesn't cost me anything. I do not know how to buy foreign bonds so I decided to go with an ETF here. The benefits include diversification into emerging markets, US denominated bonds lower currency risk, a solid yield of about 4.3% and monthly distributions. The expense ratio is fairly high at 0.59% and it does have a lower yield when compared to peers such as PCY. The distributions fluctuate which is undesirable.
This purchase is an insignificant part of my portfolio, but it does increase my annual passive income by about $10.15. I plan to keep my EMB position small, but wanted some exposure here.