Investors appear comfortable taking on emerging markets credit risk, at least in the case of the dollar-denominated Market Vectors Emerging Markets High Yield Bond ETF (NYSEArca: HYEM). HYEM has pulled in $112.2 million in new assets this year, or nearly a third of its current assets under management tally.
HYEM features a 6.71% 30-day SEC yield with a modified adjusted duration of 4.41 years, according to Market Vectors. The iShares iBoxx $ High Yield Corporate Bond ETF (NYSEArca: HYG) has a 30-day SEC yield of 4.39% and an effective duration of 3.95 years.
China is HYEM’s largest country weight at 11.8% with Brazil, Venezuela and Mexico combining for another 22.3%. HYEM’s yield to worst is 7.1%.
Market Vectors Emerging Markets High Yield Bond ETF
Tom Lydon’s clients own shares of HYG and EMB.