Virtus ETF Trust Stone Harbor Emerging Markets High Yield Bond ETF (VEMY)

Overview

The Virtus ETF Trust Stone Harbor Emerging Markets High Yield Bond ETF (EMHY) seeks to provide current income and, secondarily, capital appreciation by investing primarily in a portfolio of high-yield corporate debt securities of emerging market issuers. It aims to deliver income by focusing on higher-yielding, potentially riskier emerging market bonds.

Reputation and Reliability

Virtus Investment Partners is a multi-manager asset management firm with a history of offering diverse investment strategies.

Management Expertise

Stone Harbor Investment Partners serves as the sub-advisor, bringing specialized expertise in emerging markets debt.

Goal

To provide current income and, secondarily, capital appreciation.

Investment Approach and Strategy

Strategy: The ETF invests in a portfolio of emerging market high-yield corporate bonds.

Composition Primarily composed of high-yield corporate debt securities issued by entities in emerging market countries.

Market Share: EMHY's market share varies based on inflows/outflows compared to competitors but is a smaller player overall.

Total Net Assets (AUM): 198400000

Key Competitors

• iShares J.P. Morgan USD Emerging Markets High Yield Bond ETF (EMHY)
• VanEck J.P. Morgan EM Local Currency Bond ETF (EMLC)
• Invesco Emerging Markets Sovereign Debt ETF (PCY)

Competitive Landscape

The emerging markets high yield bond ETF space is competitive, with iShares and VanEck being major players. EMHY distinguishes itself through active management by Stone Harbor, which may offer potential for outperformance or underperformance compared to passive competitors. EMHY's disadvantage compared to larger ETFs is the less liquidity.

Historical Performance: Historical performance varies and depends on the market conditions and the selected time-frames.

Benchmark Comparison: Performance should be compared to a relevant emerging market high yield bond index, such as the J.P. Morgan Emerging Markets Corporate High Yield Index.

Expense Ratio: 0.95

Average Trading Volume

The average trading volume is moderate, impacting ease of entry and exit.

Bid-Ask Spread

The bid-ask spread is moderate and depends on the market conditions.

Market Environment Factors

Emerging market economic growth, interest rate policies, currency fluctuations, and global risk sentiment significantly influence the ETF's performance.

Growth Trajectory

Growth depends on emerging market corporate bond issuance, investor demand for high yield, and the ETF's ability to attract and retain assets.

Competitive Edge

EMHY's competitive advantage lies in its active management by Stone Harbor, which has expertise in emerging markets credit analysis and security selection. Stone Harbor's active approach aims to identify undervalued bonds and manage risk effectively. This active management allows for dynamic adjustments to the portfolio in response to changing market conditions. Whether this adds value depends on the manager's skill and the market conditions.

Volatility

Emerging market high yield bonds can exhibit higher volatility compared to developed market bonds.

Market Risk

Specific risks include emerging market credit risk, currency risk, interest rate risk, and geopolitical risk.

Ideal Investor Profile

The ideal investor is seeking high current income and is willing to accept the higher risks associated with emerging market high-yield bonds.

Market Risk

Suitable for investors with a higher risk tolerance and a long-term investment horizon, seeking income and willing to accept volatility.

The Virtus ETF Trust Stone Harbor Emerging Markets High Yield Bond ETF (EMHY) offers exposure to emerging market high yield corporate debt. EMHY is actively managed by Stone Harbor with the goal of providing current income and capital appreciation. It has a higher expense ratio than passive index trackers. The fund is most appropriate for investors with a high-risk tolerance and long-term investment horizons seeking diversification and the potential for higher returns than developed market bonds. However, EMHY has moderate liquidity.

Data Sources:

• Virtus ETF Trust, ETF.com, Bloomberg, Morningstar

Disclaimers:

The information provided is for informational purposes only and should not be construed as investment advice. Past performance is not indicative of future results. Investments in emerging markets involve risks not typically associated with investments in U.S. companies, including risks relating to political and economic instability, adverse governmental policies, restrictions on foreign investment, currency repatriation restrictions, currency fluctuations, market volatility, and the lack of developed legal structures and accounting systems. High yield bonds are subject to greater risk of loss of income and principal than higher-rated securities, and are considered speculative.