EMHC vs PCY

EMHCAState Street SPDR Bloomberg Emerging Markets USD Bond ETF

PCYBInvesco Emerging Markets Sovereign Debt ETF

In short

EMHC Emerging market debt without the currency roulette. EMHC holds only dollar-denominated bonds, and its index reaches past national governments into state-owned issuers, roughly 500 positions, for 0.23% a year.

PCY Emerging market government bonds, all issued in dollars, drawn from 20-plus countries under a "balanced" index that aims to weight them equally rather than hand the biggest slice to the biggest borrower. Trading since 2007, pays monthly.

Stated mandate

EMHC The fund seeks to track, before fees and expenses, the price and yield performance of the Bloomberg Emerging Market USD Sovereign and Sovereign Owned Index. It is designed to provide broad exposure to fixed-rate U.S.-dollar-denominated debt issued by emerging-market sovereign and quasi-sovereign issuers.

PCY The fund seeks to track the DBIQ Emerging Market USD Liquid Balanced Index, which represents liquid U.S.-dollar-denominated government bonds from emerging markets. It normally invests at least 80% of assets in index securities.

Why people hold it

• EMHC Costs 0.23% a year, below the median expense ratio in its bond peer group.
• Tracks sovereign and sovereign-owned dollar debt, roughly 500 bonds, so state-backed issuers count too, not just national governments.
• Everything in it is dollar-denominated. Local currency moves against the dollar don't flow into the return the way they do in local-debt funds.
• Pays monthly, and has run inside State Street's SPDR bond lineup since 2021.

• PCY The index spreads across more than 20 emerging market countries and aims to weight holdings equally, so the heaviest borrowers do not automatically get the heaviest weight.invesco.combloomberg.com
• Countries are reselected annually and the portfolio is rebalanced quarterly, which keeps the mix from drifting toward whichever government issued the most paper.invesco.com
• Dollar-denominated bonds only, so local currency moves are not the driver. About 100 holdings, distributions monthly.
• A multi-billion-dollar fund that has been running since 2007 and tracks its index closely.

Worth knowing

• EMHC Not one of the heavily traded names in its category. Spreads can run wider than on core bond funds like BND or SPAB, so order type and timing matter more.
• Emerging market government and state-owned credit brings default and political risk that Treasuries don't, and it sits at the riskier end of its bond cohort.
• The mandate is emerging market dollar bonds only. No Treasuries, no US corporates, so it works as a slice beside a core bond holding rather than as one.

• PCY Costs 0.50% a year, above cohort peers JPMB and EMBD at 0.39%.
• Emerging market sovereign debt is a volatile corner of the bond market: credit downgrades, default scares and rate moves all land in the price.
• Equal weighting cuts both ways. A smaller, shakier issuer can sit alongside the sturdiest ones at a similar size.bloomberg.com

Full EMHC profile⁠

Full PCY profile⁠