Van Eck to Unveil Another High-Yield Bond ETF

Van Eck, the fifth-largest U.S. ETF issuer by assets and the parent company of Market Vectors, will continue what can only be described as a torrid pace of high-yield bond ETF introductions in 2012 by rolling out the Market Vectors Emerging Markets High Yield Bond ETF HYEM on Wednesday May 9, 2012. HYEM will track the BofA Merrill Lynch High Yield US Emerging Markets Liquid Corporate Plus Index and charge an expense ratio of 0.4%. The new ETF is comprised of U.S. dollar denominated debt issued by non-sovereign emerging market issuers that are rated BB1 or lower based on average of ratings by Fitch Ratings, Moody's Investors Service and Standard & Poor's, according to ETF Daily News. As of April 2, HYEM's index included approximately 261 securities of 162 issuers from the following countries: 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. It should be noted that Hong Kong, Israel and Singapore do not have emerging markets designation while Argentina, Egypt, Kazakhstan, Nigeria, Oman, Ukraine and UAE are considered to be frontier markets. Most of the index is concentrated in the industrials sector with financials and utilities also receiving significant allocations, according to the fund's prospectus. As an emerging markets corporate bond fund, HYEM will compete with WisdomTree Emerging Markets Corporate Bond Fund EMCB and the iShares Emerging Markets Corporate Bond Fund CEMB, both of which came to market earlier this year. For more on emerging markets bond funds, please click HERE.