VanEck Emerging Markets High Yield Bond ETF (HYEM)

Overview

The VanEck Emerging Markets High Yield Bond ETF (HYEM) seeks to replicate as closely as possible, before fees and expenses, the ICE BofA Diversified US Emerging Markets Corporate Plus Index. It focuses on high-yield corporate bonds from emerging market issuers, providing exposure to a diversified portfolio of debt securities.

Reputation and Reliability

VanEck is a well-established ETF provider with a long history of offering specialized investment strategies. They are known for their expertise in niche markets and thematic investing.

Management Expertise

VanEck has a dedicated team of investment professionals with experience in fixed-income and emerging markets. They actively monitor the portfolio and make adjustments as needed to track the underlying index effectively.

Goal

To replicate as closely as possible, before fees and expenses, the price and yield performance of the ICE BofA Diversified US Emerging Markets Corporate Plus Index.

Investment Approach and Strategy

Strategy: HYEM aims to track a specific index, the ICE BofA Diversified US Emerging Markets Corporate Plus Index.

Composition The ETF holds a diversified portfolio of high-yield corporate bonds from emerging market issuers, primarily denominated in U.S. dollars.

Market Share: HYEM's market share in the emerging market high-yield bond ETF sector is notable, but varies with market conditions and competitor performance.

Total Net Assets (AUM): 836914895.71

Key Competitors

• iShares J.P. Morgan USD Emerging Markets High Yield Bond ETF (EMHY)
• Invesco Emerging Markets Sovereign Debt ETF (PCY)
• WisdomTree Emerging Markets Corporate Bond Fund (EMCB)

Competitive Landscape

The emerging market high-yield bond ETF industry is competitive, with several ETFs vying for investor capital. HYEM's advantages include its focus on corporate bonds, while disadvantages might include higher risk compared to sovereign debt focused ETFs. EMHY is a key competitor with a similar strategy but may have different credit selection. PCY focuses on sovereign debt and provides lower risk.

Historical Performance: Historical financial performance can be found in the form of past returns, which will vary based on the time period.

Benchmark Comparison: The ETF's performance is benchmarked against the ICE BofA Diversified US Emerging Markets Corporate Plus Index.

Expense Ratio: 0.4

Average Trading Volume

HYEM exhibits moderate liquidity, generally sufficient for most investors, but can fluctuate with market activity.

Bid-Ask Spread

The bid-ask spread is typically reasonable, reflecting the ETF's liquidity, but can widen during periods of market stress.

Market Environment Factors

Economic growth in emerging markets, interest rate policies of the US Federal Reserve, geopolitical events, and global risk sentiment are key factors affecting HYEM.

Growth Trajectory

HYEM's growth trajectory is tied to the overall demand for emerging market high-yield debt and the ability of the issuer to maintain a competitive expense ratio and track the index effectively.

Competitive Edge

HYEM's competitive advantage stems from its focus on the high-yield segment of the emerging market corporate bond space, allowing investors to target higher potential returns. The ETF's established track record and VanEck's expertise in emerging markets contribute to its appeal. Additionally, the diversified nature of the underlying index helps mitigate issuer-specific risk. However, high yield bonds tend to have high default risks, especially in emerging markets, which is a risk to the fund's capital.

Volatility

HYEM exhibits higher volatility compared to investment-grade bond ETFs due to the higher risk associated with high-yield debt and emerging markets.

Market Risk

Specific risks include currency risk, credit risk (potential for defaults), and liquidity risk (difficulty in selling bonds during market downturns) associated with emerging market high-yield bonds.

Ideal Investor Profile

The ideal investor is someone seeking higher potential returns from emerging markets and who is comfortable with greater risk tolerance and potential volatility.

Market Risk

HYEM is suitable for long-term investors seeking income and diversification from emerging markets and prepared to accept high yield risk.

The VanEck Emerging Markets High Yield Bond ETF (HYEM) provides exposure to a diversified portfolio of high-yield corporate bonds from emerging market issuers. It tracks the ICE BofA Diversified US Emerging Markets Corporate Plus Index and aims to replicate its performance. While it offers the potential for higher returns, investors should be aware of the inherent risks associated with high-yield debt and emerging markets. HYEM is suitable for risk-tolerant investors seeking income and diversification, understanding the possibility of heightened volatility and potential losses.

Data Sources:

• VanEck
• ETF.com
• Morningstar
• Bloomberg

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered investment advice. Investment decisions should be based on your own due diligence and risk tolerance.