PCY ETF

Lauded for their yield, emerging markets (EM) bonds could be a compelling option even when taking credit risks into account. The macroeconomic environment in particular adds intrigue to funds like the Invesco Emerging Markets Sovereign Debt ETF (PCY).

Amid expectations that the Federal Reserve will reduce interest rates this year — perhaps multiple times, — there's renewed interest in U.S. bonds, both corporate and Treasuries. However, fixed income investors shouldn't take their eye of the international ball.

Invesco Emerging Markets Sovereign Debt ETF is a high-risk investment due to its exposure to non-investment grade bonds and sensitivity to interest rates. The fund has a relatively high expense ratio compared to its peers, potentially impacting investor returns. Risks include potential defaults by issuing governments, the impact of a stronger U.S. dollar, and a global credit event.