How better instrument selection improves EM trading

Published on 23 February 2023

Emerging market (EM) debt is very heterogeneous, and liquidity access can be incredibly hard to manage. EM exchange traded funds (ETFs) can be used effectively by both tactical and strategic traders managing the investment process, with firms using ETFs to access liquidity in the short term before accessing the bond via portfolio trades once the right trade becomes available.

With trading volumes growing and bid-offer spreads being transparent, ETFs can be a valuable part of instrument selection alongside cash bonds, swaps and futures. Ramon Baljé of Flow Traders and Vasiliki Pachatouridi of BlackRock explain the value of careful instrument selection for buy-side bond traders and portfolio managers.