Active Management Makes the Difference With This ETF

Core Insights - Emerging markets debt is highly suitable for active management due to its responsiveness to various scenarios such as geopolitical events, credit defaults, interest rate fluctuations, and currency volatility [1][2]. Group 1: Active Management Benefits - The Neuberger Berman Emerging Markets Debt Hard Currency ETF (NEMD) is an actively managed fund that can navigate the complexities of the emerging markets bond market, which is often challenging for passive funds [2][3]. - NEMD's active management allows it to avoid including potentially risky issuers in its portfolio, unlike passive funds that may be exposed to dubious entities [3]. Group 2: Economic Resilience - Not all emerging economies are equally resilient; some, like Argentina, have histories of default, while others maintain stronger fiscal positions [3][5]. - Countries with deeper local investor bases have shown greater resilience to global economic shocks over the past 15 years, although an overreliance on a narrow group of domestic investors can pose risks [6]. Group 3: Market Dynamics - Active strategies like NEMD can identify which emerging markets are better positioned to absorb new issuances, benefiting investors by aligning with more stable markets [5]. - The International Monetary Fund (IMF) notes that large developing economies have expanded borrowing through local issuance, while others rely on shorter maturity financing and foreign currency debt [4].