As advisors and investors are beginning to expand their fixed-income allocations and create layered levels of risk in an investment portfolio, Van Eck Global, the money manager behind the Market Vectors exchange traded fund line, on Wednesday launched a new emerging markets high yield bond fund to meet the growing demand for alternative fixed-income investments.
Market Vectors Emerging Markets High Yield Bond ETF (NYSEArca: HYEM) has an expense ratio of 0.4%.
According to a regulatory filing, HYEM will try to reflect the BofA Merrill Lynch High Yield U.S. Emerging Markets Liquid Corporate Plus Index, which is comprised of U.S. dollar denominated debt issued by non-sovereign emerging market issuers rated BB1 or lower.
As of April 2, the underlying index includes 261 securities of 162 issuers from Argentina, Azerbaijan, Barbados, Brazil, Chile, China, Colombia, Egypt, El Salvador, Hong Kong, India, Indonesia, Israel, Jamaica, Kazakhstan, Mexico, Nigeria, Oman, Peru, the Philippines, Poland, Russia, Saudi Arabia, Singapore, South Africa, South Korea, Turkey, Ukraine, United Arab Emirates, Venezuela.
Additionally, the index has a heavy emphasis on the industrial sector, along with high weightings in the financial services and utilities sectors.
The ETF will follow a capitalization-weighted methodology. However, there is a maximum 10% country cap and 2% issuer cap.