Not only does HYEM yield well in excess of its U.S.-focused counterparts, but high-yield emerging markets corporates historically have lower default rates than U.S. equivalents. [Jump for Emerging Markets Junk Bonds]
A combined 86.3% of HYEM’s 362 holdings are rated BB or B with a third of those issues hailing from the financial services sector. Bonds issued by energy, materials and telecom firms combine for another 38% of HYEM’s weight, according to Market Vectors data.
Market Vectors Emerging Markets High Yield Bond ETF
Tom Lydon’s clients own shares of HYG.