 The
WisdomTree Emerging Markets Local Debt Fund (ELD) is an
exchange-traded fund (ETF) that invests in local currency-denominated
sovereign debt from emerging market countries. The fund seeks to track
the performance of the WisdomTree Emerging Markets Local Debt Index,
which is comprised of local currency bonds issued by emerging market
governments.
ELD is designed to provide investors with exposure
to emerging market debt while reducing the currency risk associated
with traditional dollar-denominated debt. The fund's holdings are
denominated in local currencies, which can help to insulate investors
from fluctuations in the value of the U.S. dollar.
As of March
23, 2023, the ELD had total net assets of approximately $1.48 billion.
The fund's top holdings included bonds issued by the governments of
Brazil, Indonesia, and Mexico. The majority of the fund's holdings
were invested in bonds rated below investment grade, or "junk" bonds.
Investors in ELD should be aware of the risks associated with
investing in emerging market debt. These risks include currency risk,
default risk, and political risk. Fluctuations in exchange rates can
have a significant impact on the value of the fund's holdings, and
investors should be prepared for potential losses if the value of the
local currency declines relative to the U.S. dollar. In addition,
emerging market governments may be more likely to default on their
debt than governments in developed countries, which can also result in
significant losses for investors.
Overall, ELD may be
appropriate for investors seeking exposure to emerging market debt
while managing currency risk. However, investors should carefully
consider the risks associated with this type of investment before
making a decision to invest.
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