EMB tracks the J.P. Morgan EMBI Global Core Index and holds US dollar-denominated bonds issued by governments and government-related entities in emerging markets. Because the bonds are in dollars, currency risk is lower than in local-currency funds, but credit risk is higher than in US Treasuries and returns depend on country-specific risks such as political events, defaults and restructurings. Spreads over Treasuries tend to widen when global risk appetite falls.
