Emerging-Market Debt
Emerging -market debt has become another compelling option for advisors looking for higher yields. Although historically this category has been considered a high credit risk, today many emerging market sovereign bonds may actually be much more attractive than those from developed markets, if for no other reason than that the emerging nations have cleaner balance sheets. Several European governments, for example, are hobbled by austerity measures and massive levels of debt. Advisors do need to remain cognizant of the specific country and currency risk associated with this sector, however, which is why buying a basket of emerging market debt is likely to be a better solution than purchasing debt from a single country.