EMB vs PCY ETF Comparison: AI Score, Valuation, Performance and Upside
EMB and PCY both provide U.S. dollar-denominated emerging market sovereign bond exposure but with meaningfully different index methodologies — EMB (iShares) tracks the JP Morgan EMBI Global Core Index with market-cap-weighted country exposure (largest debt issuers dominate), while PCY (Invesco) uses equal country weighting giving smaller EM countries equal portfolio allocation. EMB is the market standard for institutional EM bond exposure; PCY offers a different country allocation approach with higher potential yield from smaller markets.
EMB vs PCY is the world's dominant EM sovereign bond ETF tracking the institutional benchmark (iShares EMB with JP Morgan EMBI methodology, market-cap-weighted EM country exposure, and institutional liquidity) versus equal-country-weighted EM sovereign debt with higher exposure to smaller, higher-yielding markets (Invesco PCY providing more balanced country allocation at the cost of higher small-country credit risk and less liquidity) — benchmark liquidity versus diversification and yield.
EMB holds the edge across 4 of 5 key metrics in this comparison. EMB has delivered stronger 1-year price return (+1.18% vs -0.59% for PCY).
- Want the most liquid, institutionally accepted EM sovereign bond ETF that tracks the JP Morgan EMBI benchmark used by most EM fixed income professionals
- Prefer market-cap-weighted EM country exposure that naturally overweights the largest, most liquid EM debt markets (Mexico, Indonesia, Saudi Arabia)
- Are making larger investments where EMB's superior liquidity and tight bid-ask spreads significantly reduce trading cost versus less liquid PCY
- Want equal country weighting in EM sovereign bonds to reduce concentration in the largest EM debt issuers and increase exposure to smaller, potentially higher-yielding EM markets
- Are comfortable with PCY's smaller AUM and slightly less liquidity than EMB in exchange for a different country allocation profile
- Value portfolio diversification against EMB by holding a differently-weighted EM bond ETF when both EMB and PCY are available as complementary holdings
| Metric | EMB | PCY |
|---|---|---|
| ETF scorei | 24.3 | 24.3 |
| Latest closei | $91.82 | $20.32 |
| 1M returni | -0.77% | -0.89% |
| 3M returni | -2.62% | -3.43% |
| 6M returni | -1.75% | -3.04% |
| 1Y returni | +1.18% | -0.59% |
The ETF score weights long-term returns and risk-adjusted performance most heavily, but still rewards low expense ratios, larger fund size, and broader diversification — so it can favor low-cost, broad, mega-cap funds over smaller thematic or actively-managed funds even when the latter have delivered stronger returns.
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | EMB | PCY |
|---|---|---|
| 1Y ago | $10.67K (+6.7%) started 2025-10-15 | $10.56K (+5.6%) started 2025-10-15 |
| 5Y ago | $14.32K (+43.2%) started 2021-10-15 | $15.16K (+51.6%) started 2021-10-15 |
| 10Y ago | $23.69K (+136.9%) started 2016-10-17 | $24.53K (+145.3%) started 2016-10-17 |
Hypothetical — past performance does not guarantee future results.
| Metric | EMB | PCY |
|---|---|---|
| Expense ratioi | 0.39% | 0.50% |
| Total assets (AUM)i | $12.93B | $1.17B |
| Dividend yieldi | 5.36% | 6.32% |
| Trailing P/Ei | N/A | N/A |
| Betai | 0.54 | 0.75 |
| 52-week change | 1.18% | -0.59% |
| Metric | EMB | PCY |
|---|---|---|
| 1Y returni | +1.18% | -0.59% |
| 6M returni | -1.75% | -3.04% |
| 3M returni | -2.62% | -3.43% |
| 1M returni | -0.77% | -0.89% |
| 1Y Sharpe ratio | -0.53 | -0.63 |
| Betai | 0.54 | 0.75 |
| Dividend yieldi | 5.36% | 6.32% |
| 5Y CAGR | +1.46% | +0.86% |
Over the past year, EMB and PCY have moved strongly in the same direction (correlation of 0.97), based on daily returns.
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | EMB | PCY |
|---|---|---|---|
| 1Y | Growthi | +1.18% | -0.59% |
| CAGRi | +1.18% | -0.59% | |
| Volatilityi | 5.92% | 7.66% | |
| Sharpe ratioi | -0.53 | -0.63 | |
| Sortino ratioi | -0.72 | -0.83 | |
| Max drawdowni | 5.23% | 7.57% | |
| Current drawdowni | 3.46% | 5.14% | |
| Avg drawdowni | 1.10% | 1.78% | |
| Ulcer Indexi | 1.67% | 2.50% | |
| Max daily dropi | 1.56% | 2.08% | |
| Max wkly dropi | 2.60% | 3.61% | |
| 5Y | Growthi | +7.54% | +4.40% |
| CAGRi | +1.46% | +0.86% | |
| Volatilityi | 9.80% | 13.24% | |
| Sharpe ratioi | -0.26 | -0.21 | |
| Sortino ratioi | -0.37 | -0.30 | |
| Max drawdowni | 27.52% | 36.05% | |
| Current drawdowni | 3.46% | 5.14% | |
| Avg drawdowni | 8.95% | 12.30% | |
| Ulcer Indexi | 11.76% | 15.68% | |
| Max daily dropi | 2.65% | 3.76% | |
| Max wkly dropi | 6.05% | 9.20% | |
| 10Y | Growthi | +28.33% | +17.83% |
| CAGRi | +2.53% | +1.66% | |
| Volatilityi | 9.94% | 12.96% | |
| Sharpe ratioi | -0.15 | -0.15 | |
| Sortino ratioi | -0.20 | -0.20 | |
| Max drawdowni | 28.74% | 38.02% | |
| Current drawdowni | 3.46% | 5.14% | |
| Avg drawdowni | 6.49% | 9.25% | |
| Ulcer Indexi | 9.62% | 13.15% | |
| Max daily dropi | 9.22% | 12.52% | |
| Max wkly dropi | 16.16% | 22.04% |
| Category | EMB | PCY |
|---|---|---|
| Fund name | iShares J.P. Morgan USD Emerging Markets Bond ETF | Invesco Emerging Markets Sovereign Debt ETF |
| Type | ETF | ETF |
| Expense ratioi | 0.39% | 0.50% |
| Total assets (AUM)i | $12.93B | $1.17B |
| Dividend yieldi | 5.36% | 6.32% |
- World's most liquid EM bond ETF — EMB's enormous AUM and trading volume creates tight bid-ask spreads; institutional investors, financial advisors, and algorithmic traders all use EMB; this liquidity makes entry and exit efficient even for large positions
- JP Morgan EMBI is the industry standard EM sovereign debt benchmark — asset managers benchmark against JP Morgan's EM bond indices; EMB's JP Morgan EMBI Global Core provides an investable version of the benchmark that most professional investors track
- Broad country diversification across approximately 35 EM countries — EMB's exposure to Mexico, Indonesia, Brazil, Philippines, Turkey, Saudi Arabia and dozens of other EM economies provides geographic diversification across the developing world
- Equal country weighting provides more exposure to higher-yielding smaller EM countries — in a cap-weighted EM bond index like EMB, Mexico and Indonesia dominate; PCY's equal weighting gives more weight to countries like Ecuador, Ghana, Egypt, or Ukraine that offer higher yields (and correspondingly more credit risk)
- Diversified across a broader set of EM countries reduces single-country concentration — when a large EM country like Mexico or Turkey has credit stress, PCY is less impacted than EMB because Mexico/Turkey are not disproportionately weighted
- Invesco brand and competitive expense ratio — Invesco offers PCY at a competitive expense ratio; Invesco has significant experience in fixed income ETF management
- USD-denominated focus means no local currency exposure — EMB holds only USD bonds (not local currency bonds like LEMB); investors don't benefit from EM currency appreciation but also don't face EM currency depreciation risk; this is important for EM investors evaluating total return drivers
- Credit risk from EM sovereign defaults — EM countries can and do default on external debt; Argentina (multiple times), Ecuador, Ukraine, Zambia, Sri Lanka are recent examples; diversification dilutes but doesn't eliminate individual sovereign default risk
- U.S. dollar strength creates headwinds for EM borrowers — EM countries borrowing in USD face higher debt service costs when their local currency weakens against the dollar; USD appreciation can stress EM sovereign balance sheets and increase default risk
- Equal weighting creates higher exposure to frontier/smaller EM markets that may have less liquidity and higher default risk — smaller EM countries in PCY's portfolio may be less liquid and have higher idiosyncratic default risk; PCY can underperform EMB significantly when smaller EM countries face credit stress
- DBIQ index is less well-known than JP Morgan's EMBI benchmark — institutional investors benchmark against JP Morgan EM bond indices; PCY's DBIQ index is less commonly used as a benchmark, making institutional adoption lower than EMB
- Less liquid than EMB — PCY has substantially less AUM and trading volume than EMB; for larger investment amounts, bid-ask spreads in PCY may be wider than EMB
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