One such possibility is opening up through the Investment Management Association (IMA), who have created a Global Emerging Markets Bond sector.
In general terms, the organisation regularly reviews to see if there is the need to create a new sector, that is, if there is a sufficient critical mass of bond funds to warrant a new sector. This has been the case with the Global Emerging Markets Bond sector which opened up for business on 31 December 2013.
Funds in the new sector are those which invest at least 80% of their assets in emerging market bonds as defined by a recognised global emerging market bond index. They must also be diversified by geographic region, according to the IMA.
Firms with funds in the existing sectors have until 31 March 2014 to comply with the new sector, while funds entering the sector are expected to comply at entry.
The notion that risk-averse investors could find profitable returns from emerging market bonds is supported by BlackRock's Russ Koesterich, saying: “We would also encourage investors with longer-term time horizons to consider emerging markets despite their recent underperformance, as they too offer compelling value.”
But he added that more volatility was expected in 2014, cautioning investors to be more selective when picking securities.
