News on Bond Funds in the Emerging Market

Lately all of hottest bond funds on the market stem from emerging-market debt funds. Not only are these bond funds offering better returns than most U.S. funds and even generous returns (Mexican issues have paid more than 6 percent), but they are a way to get away from the weak dollar. In only 4 weeks, investors have poured more than $1.7 billion into emerging-market bond funds, according to fund researcher Lipper Inc., more than any other fixed-income fund category. Investing in government and corporate debt from developing nations like Mexico, Brazil and Russia, has seen inflows of $11.4 billion, up 20% from a year earlier. "A larger portion of portfolios that have historically been dominated by developed countries are increasingly flowing to emerging markets," says Ramin Toloui, one of the leaders of the emerging markets portfolio management team for Pimco.