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First Trust launches active emerging market bond ETF (FEMB)

First Trust continues to expand its line-up, having launched roughly two dozen products this year, including a recent launch early this month.

Eurozone AlphaDEX ETF (FEUZ), Long/Short Equity ETF (FTLS) and Strategic Income ETF (FDIV) are some of its latest products. The most recently launched fund — First Trust Emerging Markets Local Currency Bond ETF — has hit the markets on November 4 and trades under the symbol FEMB. The fund is actively managed and looks to provide exposure to emerging market bonds. Below, we have highlighted some of the key details regarding this fresh product.


The actively managed fund seeks to maximize total income and current income by actively managing currency exposure thereby minimizing volatility.  The fund invests in bonds, notes, bills, certificates of deposit, time deposits, commercial paper and loans issued by issuers in emerging market countries that are denominated in the issuer’s local currency.

The fund nicely spreads its assets across a number of emerging markets with Mexico, Turkey and Indonesia taking the top three spots with roughly 10% exposure each. This is followed by Brazil, Poland and South Africa with a little over 9% exposure each. FEMB presently holds 13 bonds with 23% allocation to the top three bonds.
The active management strategy renders the fund slightly expensive with 85 basis points as fees.

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