While the United States and much of the Western world struggle with an anemic economy, a number of emerging-market economies are among the world’s largest and fastest growing. Although the news may seemed filled with stories about debt-ridden Greece, now may be the right time to explore funds that tap into relatively stable emerging markets.

One way for investors to gain exposure to emerging markets is through the iShares JPMorgan USD Emerging Markets Bond Fund (EMB), a fixed-income fund that seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the JPMorgan EMBI Global Core Index. EMB is a U.S. dollar-dominated, emerging markets debt benchmark that tracks the total return of actively traded external debt instruments in emerging market countries.

So far, EMB is reflecting a positive trend for debt instruments in emerging markets. The fund, which began in December 2007, rose an impressive 27.2% in 2009, after a rough 2008. It had total net assets of $1.27 billion and 12.3-million shares outstanding, as of March 29, 2010.

EMB invests in debt instruments from 26 emerging market countries. The fund’s top five holdings as of March 29, 2010, were: Russia (7.5% coupon, 3/31/2030 maturity, Baa1/BBB ratings), 9.16%; the Philippines, (7.75% coupon, 1/14/2031 maturity, Ba3/BB- ratings), 4.43%; Turkey (7.25% coupon, 3/15/2015 maturity, Ba3/BB), 4.35%; Brazil (8% coupon, 1/15/2018 maturity, Baa3/BBB-), 4.08%; and Turkey (6.88% coupon, 3/17/2036, Ba3/BB), 3.79%.

Those countries are expected to have higher economic growth rates in 2010 than advanced economies, according to a recent International Monetary Fund (IMF) forecast. While the advanced economies are expected to grow just 0.6% this year, the following growth rates are eyed for Russia, 1.5%; Brazil, 2.5%; Turkey, 1.5%; Mexico, 3.0%; and the Philippines, 1.6%.

Other economic-growth forecasts are more aggressive than the IMF projections. The European Bank for Reconstruction and Development (EBRD) forecasts economic growth for Russia of 3.9% this year. In Latin America, the Central Bank of Brazil projects economic growth for its country of 5.0%, and the Central Bank of Mexico is predicting 3.9% growth in its nation this year.

A prolonged period of low U.S. interest rates and indications from the Fed that interest rates will stay low for some time are reasons to consider heightened yields abroad. Meanwhile, U.S. government debt is rising quickly and it will grow further once the effects of the new health-care program take hold. If you share my concerns about the U.S. government’s profligate spending, you may be enticed by the attractive yields of foreign bonds, specifically in emerging markets. Such bonds are not risk-free by any means, but they offer a significantly higher return to compensate you for the potential loss of principal on your investment.

Emerging markets certainly can be risky, so I advise you to monitor your investments closely and to stick to your stop losses. If you’d like particular advice about ETFs, including appropriate stop losses, please sign up for my ETF Trader service. As always, I am glad to answer your questions about ETFs, so do not hesitate to email me at askdoug@dougfabian.com. You may see your question answered in an upcoming ETF Talk.