Market Vectors presents international high yield bond ETF
Market Vectors ETF Trust has unveiled International High Yield Bond ETF, which the company claims to be the first US listed exchange-traded fund (ETF), developed to address a segment of the high-yield bond market.
Market Vectors' marketing director Edward Lopez said the research carried by the firm has shown that for many investors the current allocation to corporate high-yield debt may miss as much as 35% of the global high-yield market.
"That underexposure may be especially important as international corporate high-yield bonds currently offer higher yields as well as historically lower default rates than similar debt instruments issued in the US."
The BofA Merrill Lynch Global Ex-US Issuers High Yield Constrained Index (HXUS) is denominated in major global currencies, including Euros, US dollars, Canadian dollars or British pound sterling, issued in the major domestic or Eurobond markets.
As of 27 March 2012, the Index included 1,008 debt issues of 546 corporations located in 69 countries including a 33% allocation to emerging market bonds.
Additionally, the index yield to worst of 8.3% was 1.2% higher than U.S. high-yield bonds, as represented by The BofA Merrill Lynch U.S. High Yield Master II Index.
The company said that it has created an income-oriented ETF that, by tracking its index, may offer high-yield diversification, a high level of potential income and exposure to issuers worldwide that may experience more robust economic growth than the US.