category. “I like the way these funds spread the risk among different countries and different types of issuers,” she says. “The managers have experience in this asset class, too.”
Emerging markets bond funds have enjoyed six straight years of double-digit gains, from 1999 to 2004. But before the streak began, the category lost 22% in 1998, so there may be down years in the future. “After an extended rally,” says Dutta, “investors should be doubly cautious.”
Nevertheless, worldwide economic growth seems to be continuing, and developing countries rich in natural resources are benefiting from higher commodity prices. Long-term investors interested in diversifying their bond portfolios should consider emerging markets.
TOP EMERGING MARKETS BOND FUNDS RANKED BY 3-YEAR RETURN
| Name | Ticker | 1-Yr. Total Return* | 3-Yr. Annualized Total Return* | 5-Yr. Annualized Total Return* | Minimum Initial Purchase | Phone Number | Expense Ratio |
| AllianceBernstein Emerging Mkt Debt A | AGDAX | 19.83 | 22.95 | 16.16 | $2,500 | 800-227-4618 | 1.21 |
| PIMCO Emerging Markets Bond A | PAEMX | 21.76 | 20.50 | 18.95 | $5,000 | 888-877-4626 | 1.25 |
| TCW Galileo Emerging Markets Income I | TGEIX | 19.85 | 20.14 | 15.83 | $2,000 | 800-386-3829 | 1.20 |
| MFS Emerging Markets Debt A | MEDAX | 24.40 | 19.85 | 17.81 | $1,000 | 800-225-2606 | 1.41 |
| T. Rowe Price Emerging Markets Bond | PREMX | 25.83 | 19.69 | 14.98 | $2,500 | 800-638-5660 | 1.08 |
| Fidelity New Markets Income | FNMIX | 21.74 | 19.67 | 14.41 | $2,500 | 800-343-3548 | 0.94 |
| MainStay Global High Income A | MGHAX | 21.98 | 19.36 | 15.09 | $1,000 | 800-624-6782 | 1.53 |
| Fidelity Advisor Emerg Mkts Inc T | FAEMX | 21.77 | 19.11 | 13.86 | $2,500 | 877-208-0098 | 1.44 |
Source: Morningstar Inc.
Morningstar makes every effort to ensure the completeness and accuracy of this data but cannot guarantee it.
*Returns through June 30, 2005, DISTINCT SHARE CLASS, RETAIL ONLY