Emerging Markets Bond Index (EMBI)

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Definition of 'Emerging Markets Bond Index (EMBI)'

The Emerging Markets Bond Index (EMBI) is a benchmark index that tracks the performance of bonds issued by emerging market governments and corporations. It is calculated by JPMorgan Chase & Co. and is based on the prices of bonds in the JPMorgan EMBI Global Diversified Index. The EMBI is a widely used indicator of the performance of emerging market debt and is often used as a reference point for investors who are considering investing in emerging market bonds.

The EMBI is divided into two sub-indices: the EMBI Global Diversified Index and the EMBI Global Core Index. The EMBI Global Diversified Index includes bonds from all emerging market countries, while the EMBI Global Core Index includes bonds from only the largest and most liquid emerging market countries.

The EMBI is a floating-rate index, which means that the value of the index is adjusted to reflect changes in interest rates. This makes the EMBI a useful tool for investors who are looking for a way to hedge against interest rate risk.

The EMBI is also a relatively volatile index, which means that its value can fluctuate significantly over time. This volatility can be a source of risk for investors, but it can also be an opportunity for investors who are looking to make short-term profits.

The EMBI is a valuable tool for investors who are considering investing in emerging market debt. It provides a benchmark for the performance of emerging market bonds and can be used to assess the risk and return of different emerging market bond investments.

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