GEMD Profile
The Goldman Sachs Access Emerging Markets USD Bond ETF aims to provide investors with exposure to a diversified portfolio of U.S. dollar-denominated bonds issued by emerging market entities. The fund seeks to invest at least 80% of its assets in securities that are included in its underlying index, which is designed to reflect the performance of investment-grade and high-yield bonds from emerging market governments and quasi-governmental entities. This focus allows investors to access the potential growth of emerging markets while managing currency risk through U.S. dollar-denominated securities.
The underlying index is a rules-based benchmark that selects bonds based on a combination of liquidity, governance, and fundamental screening criteria. It includes a broad spectrum of debt instruments, from high-credit-quality investment-grade bonds to higher-risk high-yield securities. This comprehensive approach aims to capture the full spectrum of opportunities within the emerging markets debt landscape, offering a balanced exposure to both safer and higher-return bonds.
Emerging market bonds can offer higher yields compared to their developed market counterparts, reflecting the increased risks associated with investing in these regions. The ETF's focus on U.S. dollar-denominated securities helps mitigate currency risk, as the bonds are issued in dollars and thus shielded from fluctuations in local currencies. The fund's rules-based index methodology ensures that selected bonds meet rigorous standards for liquidity and governance, enhancing the overall stability and reliability of the investment.
Investors should be aware that, while the ETF offers access to potentially high-return emerging markets bonds, it also entails risks inherent in investing in developing economies, such as political instability, economic volatility, and changes in credit ratings. The fund's emphasis on both investment-grade and high-yield bonds provides a diversified exposure within the emerging markets debt sector, aligning with strategies aimed at capturing growth opportunities while managing risk through a structured investment approach.
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