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The case for buying emerging market bonds

BlackRock expert: Buy emerging market bonds
BlackRock expert: Buy emerging market bonds

Emerging market bonds may sound like a risky pick right now, but they could be a terrific way to add yield to your portfolio, according to Pablo Goldberg, emerging market debt portfolio manager at BlackRock.

"We see the factors that have been hurting emerging market currencies for the past few years are now turning around," Goldberg said Wednesday on CNBC's "Trading Nation."

"The headwinds are turning into tail winds, making the case for investing in emerging market debt more compelling," he wrote in a recent note.

First, Goldberg sees Chinese growth picking up. A slowing China has been a major issue for emerging markets around the globe.

Additionally, commodities are no longer in free fall, which helps the rather commodity-dependent emerging markets as a group.

Also, a Federal Reserve that appears less inclined to raise rates has sent the dollar lower.

Read MoreChina's commodities meltdown could rock the markets

A rising U.S. currency is big trouble for emerging bonds. In cases in which the bonds must be paid back in dollars, that becomes more difficult, increasing credit risk. In cases in which the bonds are paid back in local currency, the same amount of such currencies is worth less once they're converted back into dollars.

Since he sees the greenback continuing to be weak, at this time, Goldberg recommends that investors not hedge their currency exposure.

In terms of specific countries, Goldberg believes that one of the most promising emerging markets now is Brazil, which could seem a surprising choice given the country's economic contraction over the years under President Dilma Rousseff's leadership. The country's economic output shrank by 3.8 percent last year and unemployment soared to 10.9 percent. But most of all, Brazilians are enraged by Rousseff's efforts to hide a $35 billion budget deficit.

"Clearly growth still has a lot to recover. We need to see some clear fiscal measures put in place to turn around the very difficult story that we have there on the fiscal side and the investment climate has not been the best," said Goldberg.

Paulo Whitaker | Reuters

But the portfolio manager also stresses that efforts to combat inflation and rate hikes are taking place in Brazil, which could make rates more attractive for investors. This is in spite of Rousseff's suspension Thursday and impending impeachment trial.

"All the political jitters have only made investment decline over the last few years. However, the rates side is what we're focusing our attention on. We see significant disinflation reports taking place in Brazil right now, probably a little more than the markets expect," he added.

Read MoreSuspended Brazilian president Rousseff vows to fight on

Mexico is also high on Goldberg's list of emerging markets to watch. While the peso has been on a downtrend, the country's central bank raised rates in February and intervened in the foreign exchange market to make sure the currency didn't slide even further.

"The Mexican peso is an asset that has been favored by many investors for a long time, but never produced the kind of returns that everyone was expecting. Part of the reason is the Mexican peso is used as a proxy for emerging market risk," said Goldberg. "But valuations have gotten to a point where if the U.S. starts growing a little bit, with the Mexican central bank having increased rates to defend the currency, and given the level of yields that we have globally, it can actually be an attractive market."

Rounding out his country picks are Russia and Indonesia.