At a glance
FEMB charges 0.85% a year, above the 0.3% average of the 7 funds most like it (the most expensive of 8). It has $361.9M in assets, the 4th largest of that group; it paid 7.57% of its price in distributions over the past 12 months, monthly. Over the past year it returned +2.8% with distributions reinvested, the best of those 8 funds; over three years it returned +8.2% a year. At its worst it fell 22.0% in the 2020 crash (S&P 500: 33.7%) and 20.1% in the 2022 bear market (S&P 500: 24.5%), and was back at its earlier high 8 months and 9 months after the lows. Its ten largest positions make up 35.0% of the fund, out of 57 in all.
The short version
First Trust Emerging Markets Local Currency Bond ETF (FEMB) is an actively managed fund that buys government bonds from emerging market countries such as Indonesia, Brazil and South Africa. The bonds are paid in those countries' own currencies, not US dollars, so returns move with exchange rates as well as interest rates. It pays monthly income, but its 0.85% expense ratio is the highest of eight comparable funds, whose average is 0.30%.
Price history
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FEMB +2.8% over the year to Oct 27, 2026, total return with distributions reinvested.
How it has behaved
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | Since start | |
|---|---|---|---|---|---|---|
| FEMB official prospectus, to Dec 31, 2025 | — | +20.76% | — | +0.84% | +3.03% | +0.96% |
| FEMB price data to Oct 27, 2026 | 0.0% | +2.8% | +8.2% | +3.4% | +1.7% | +0.9% |
- Over the year to Oct 27, 2026, FEMB returned +2.8%, 1st of 8 among similar funds.
- Its 5-year annualized return was +3.4% and its 10-year +1.7%.
- In the 2020 COVID crash it fell 22% and regained its old high 8.1 months after the low.
- Its worst full calendar year was 2015 (-14.1%); its best was 2025 (+22.2%).
- The deepest fall in its price history was 30.4% (Dec 18, 2020 to Oct 19, 2022), recovered by Sep 11, 2025.
Show as a table
| Year | Price data | Prospectus (official) |
|---|---|---|
| 2026 (to date) | +0.0% | — |
| 2025 | +22.2% | +20.76% |
| 2024 | -5.7% | -5.30% |
| 2023 | +17.4% | +16.83% |
| 2022 | -10.4% | -9.96% |
| 2021 | -13.4% | -13.34% |
| 2020 | +3.2% | +3.03% |
| 2019 | +11.5% | +11.58% |
| 2018 | -7.2% | -7.22% |
| 2017 | +11.9% | +12.57% |
| 2016 | +7.3% | +7.72% |
| 2015 | -14.1% | — |
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Before this security existed |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Lost 22% over that stretch · deepest drop along the way 22%, back to its old high 8.1 months after the low |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Lost 17.5% over that stretch · deepest drop along the way 20.1%, back to its old high 9 months after the low |
Dividends and income
Show as a table
| Year | Per share | Change |
|---|---|---|
| 2026 (to date) | $1.7100 | |
| 2025 | $1.8000 | +15.4% |
| 2024 | $1.5600 | 0.0% |
| 2023 | $1.5600 | -8.2% |
| 2022 | $1.7000 | -11.5% |
| 2021 | $1.9200 | -5.0% |
| 2020 | $2.0200 | -4.3% |
| 2019 | $2.1100 | -3.2% |
| 2018 | $2.1800 | -18.7% |
| 2017 | $2.6800 | +13.6% |
| 2016 | $2.3600 | +21.0% |
| 2015 | $1.9500 |
What's inside
As of Jul 31, 2026, the fund held 57 securities; the ten largest made up 35.04% of assets.
| Holding | Weight | |
|---|---|---|
| THAILAND, KINGDOM OF - MINISTRY OF FINANCE Bonds and notes | 4.22% | |
| MALAYSIA, FEDERATION OF Bonds and notes | 3.79% | |
| INDIA, GOVERNMENT OF Bonds and notes | 3.72% | |
| INDONESIA, REPUBLIC OF - MINISTRY OF FINANCE Bonds and notes | 3.72% | |
| INDONESIA, REPUBLIC OF - MINISTRY OF FINANCE Bonds and notes | 3.55% | |
| POLAND, REPUBLIC OF - STATE TREASURY Bonds and notes | 3.54% | |
| SOUTH AFRICA, REPUBLIC OF - NATIONAL TREASURY Bonds and notes | 3.27% | |
| COLOMBIA, REPUBLIC OF - MINISTERO DE HACIENDA Y CREDITO PUBLICO Bonds and notes | 3.14% | |
| INDONESIA, REPUBLIC OF - MINISTRY OF FINANCE Bonds and notes | 3.07% | |
| CHILE, REPUBLIC OF - MINISTRY OF FINANCE Bonds and notes | 3.03% | |
| BRAZIL, FEDERATIVE REPUBLIC OF - SECRETARIA DO TESOURO NACIONAL Bonds and notes | 2.96% | |
| SOUTH AFRICA, REPUBLIC OF - NATIONAL TREASURY Bonds and notes | 2.95% | |
| INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (WORLD BANK) Bonds and notes | 2.80% | |
| INDONESIA, REPUBLIC OF - MINISTRY OF FINANCE Bonds and notes | 2.79% | |
| BRAZIL, FEDERATIVE REPUBLIC OF - SECRETARIA DO TESOURO NACIONAL Bonds and notes | 2.69% |
By country
Indonesia 13.93%Brazil 10.33%South Africa 9.19%Malaysia 8.5%Thailand 6.35%By issuer
Foreign governments 92.83%The bonds mature in 7.1 years on average (weighted by size), with an average coupon of 7.18%.
Source: N-PORT holdings report as of Jul 31, 2026. Cash, money-market funds and derivatives are shown separately from the securities list.What changed recently
- Over the three months to Jul 31, 2026, investors added a net $8.8M (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: +0.67%, +0.49%, +0.56%.
How it works
FEMB does not track an index. Its sub-advisor, First Trust Global Portfolios Limited, picks the holdings. At least 80% of net assets go into bonds, notes and bills issued or guaranteed by emerging market governments, their agencies, central banks or supranational lenders such as the World Bank. These bonds are priced in the issuer's local currency. The manager weighs long-term economic themes and shorter-term factors such as valuations, liquidity and investor sentiment. It adjusts country weights, duration (how sharply the portfolio reacts to rate changes) and individual bonds on an ongoing basis rather than on a set rebalancing schedule.
Exposure to any one country is generally capped at 20% of net assets. The fund may own bonds of any credit quality, including unrated and high-yield ("junk") debt, but each bond must be paying as promised when bought. As of July 31, 2026, it held 88 positions, and the top ten made up about 35% of assets. The largest were a Thai government bond due 2037 (4.2%), a Malaysian bond due 2031 (3.8%) and an Indian bond due 2037 (3.7%). The average maturity was 7.1 years.
Up to 20% of net assets may go into derivatives such as currency forwards. These are used mainly to hedge or adjust interest-rate and currency exposure, not to add leverage. The fund is "non-diversified" and creates and redeems shares for cash, which may make it less tax-efficient than many ETFs.
What it really costs
- FEMB charges 0.85% a year, versus an average of 0.3% for the similar funds below (8th of 8, cheapest first).
Structure and tax notes
- Bond prices move opposite to interest rates; the longer the maturities it holds, the more its price reacts to rate changes.
In a retirement portfolio
Local-currency emerging market bonds pay high income, but currency swings have caused stock-like losses, so the fund suits a small slice of a portfolio rather than its bond core.
FEMB adds income from countries like Indonesia and Brazil, and its returns depend partly on their currencies. As of October 27, 2026, its trailing 12-month yield was 7.57%, paid monthly. Downturns have been deep. The fund launched in 2014, so it missed 2008. In the 2020 COVID crash it fell 22% and took about 8 months to recover. In 2022 it dropped 20.1% and needed 9 months. Its worst calendar year by price was 2015, down 14.1%. Its deepest drop, 30.4% from December 2020 to October 2022, took almost 35 months to recover. Anyone selling shares in a bad stretch could have locked in large losses.
The 0.85% expense ratio is well above the 0.30% peer average. Past results don't predict future returns, and a retirement plan should look at the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Investors who want monthly income from emerging market government bonds, with a trailing yield of 7.57% as of October 27, 2026.
- People who want exposure to currencies like the Indonesian rupiah and Brazilian real as a small diversifier next to US dollar holdings.
- Those who prefer an active manager adjusting country weights and duration over a fund that simply follows a bond index.
Look elsewhere if
- Cost-conscious investors: the 0.85% expense ratio ranks last of eight similar funds, and EBND charges 0.30%.
- Retirees who need stable bond values; the fund fell 30.4% from 2020 to 2022 and took almost 35 months to recover.
- Investors who want emerging market bonds paid in US dollars, which funds such as EMB hold, avoiding local currency swings.
Close alternatives
Matched by bond funds with the closest average maturity and issuer mix (N-PORT).
| Fund | Avg. maturity | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|---|
| FEMB this fund | 7.1 yrs | 0.85% | $361.9M | +2.8% | +8.2% |
| EBND SPDR Bloomberg Emerging Markets Local Bond … | 8.8 yrs | 0.3% | $2.26B | +2.1% | +7.7% |
| EMBD Global X Emerging Markets Bond ETF | 9.2 yrs | 0.39% | $248.4M | +0.3% | +9.8% |
| BNDX Vanguard Total International Bond ETF | 8.7 yrs | 0.07% | $122.53B | -0.6% | +4.1% |
| JPMB JPMorgan USD Emerging Markets Sovereign Bon… | 10.9 yrs | 0.39% | $95.1M | -0.4% | +8.5% |
| EMB iShares J.P. Morgan USD Emerging Markets Bo… | 11 yrs | 0.39% | $14.61B | 0.0% | +9.0% |
| GEMD Goldman Sachs Access Emerging Markets USD B… | 11.2 yrs | 0.3% | $35.5M | -0.8% | +8.9% |
| EMHC SPDR Bloomberg Emerging Markets USD Bond ETF | 11.2 yrs | 0.23% | $271.8M | -0.6% | +9.2% |
Questions investors ask
Does FEMB pay monthly dividends?
Yes. FEMB pays income monthly. Over the 12 months to October 27, 2026, it paid $2.13 per share, a trailing yield of 7.57%. The high yield reflects the interest rates emerging market governments pay on local-currency debt, with an average coupon of 7.18% as of July 31, 2026. Payments can vary from month to month, and the share price can fall when emerging market currencies weaken against the dollar, so a high yield doesn't guarantee a positive total return.
What's the difference between FEMB and EBND?
Both hold emerging market government bonds in local currencies, but FEMB is actively managed and costs more. FEMB's expense ratio is 0.85%, while SPDR Bloomberg Emerging Markets Local Bond ETF (EBND) charges 0.30%. EBND is much larger, with $2.26 billion in net assets as of June 30, 2026, against FEMB's $362 million. As of October 27, 2026, FEMB returned 2.8% over one year and 8.2% a year over three years. EBND returned 2.1% and 7.7%.
Is FEMB a good bond fund for retirement?
FEMB behaves less like a typical bond fund and more like a higher-risk satellite holding. It pays monthly income, but currency swings drive much of its return. Over the 10 years to December 31, 2025, it returned 3.03% a year. Over five years it returned 0.84% a year, despite a 20.76% gain in 2025. It fell 30.4% between December 2020 and October 2022 and didn't recover until September 2025. That matters for anyone who may need to sell shares during a slump.
How much has FEMB lost in bad years?
FEMB's losses have been larger than many investors expect from a bond fund. Its official returns were −13.34% in 2021 and −9.96% in 2022. Its worst quarter was the first quarter of 2020, at −16.51%. Measured by share price, its largest drop was 30.4%, from December 18, 2020, to October 19, 2022. Recovery took almost 35 months. Price-based figures show its worst calendar year was 2015, down 14.1%.
Is FEMB currency hedged?
Not as a rule. FEMB is built to hold bonds in local currencies, so currency moves against the US dollar are a main source of both gains and losses. The manager may use currency forwards and other derivatives to hedge or adjust that exposure, within a 20% limit on derivatives. As of July 31, 2026, the fund held 31 derivative contracts, mostly currency contracts. Investors who want to avoid currency risk may look at dollar-denominated funds such as EMB, which follow a different strategy.