VanEck Emerging Markets High Yield Bond ETF (HYEM)HYEM

VanEck Emerging Markets High Yield Bond ETF (HYEM)

Profile:

HYEM is an actively managed ETF that invests in high-yield fixed income securities issued by companies in emerging markets. The fund aims to provide investors with high current income and long-term capital appreciation through a diversified portfolio of debt instruments.

Objective:

The primary investment goal of HYEM is to maximize total return through a combination of current income and capital appreciation.

Issuer:

HYEM is issued by VanEck, a global investment manager with over 150 years of experience. The company is known for its expertise in emerging markets and fixed income investing.

Market Share & Assets:

HYEM has a market share of 8.97% in the Emerging Markets High Yield Bond ETF category. As of today, it has total net assets of $811.15 million.

Moat:

HYEM's competitive advantages include:

• Experienced Management: The ETF is managed by a team of experienced professionals with a strong track record in emerging markets fixed income.
• Active Management: The active management approach allows the portfolio managers to take advantage of market opportunities and mitigate potential risks.
• Diversified Portfolio: The ETF has a diversified portfolio of over 400 holdings, reducing concentration risk and providing exposure to various sectors and countries.

Financial Performance:

HYEM has a 3-year annualized return of 2.13%, with a YTD return of -7.64%. It has outperformed the benchmark index, the Emerging Markets High Yield USD Bond Index, by 0.18% over the past 3 years.

Growth Trajectory:

The emerging markets high yield bond market is expected to experience moderate growth in the coming years, driven by economic recovery and favorable interest rate conditions.

Liquidity:

HYEM has an average trading volume of 313,737 shares per day. The bid-ask spread is typically tight, making the ETF easy to buy and sell.

Market Dynamics:

Factors affecting HYEM's market environment include global economic conditions, interest rates, and emerging market risk appetite.

Competitors:

The top competitors of HYEM include:

• iShares Emerging Markets High Yield Bond ETF (EMHY): 73.15% market share
• SPDR Bloomberg Barclays Emerging Markets High Yield Bond ETF (EHY): 16.77% market share

Expense Ratio:

HYEM has an expense ratio of 0.64%, which is slightly higher than the average for emerging markets high yield bond ETFs.

Investment Approach & Strategy:

HYEM uses an active management approach to select its holdings. The portfolio aims to outperform the benchmark index by focusing on undervalued opportunities and managing risk through diversification.

Key Points:

• High Current Income: HYEM offers a high distribution yield compared to traditional fixed income investments.
• Active Management: The experienced management team aims to maximize total return through active stock selection.
• Diversified Portfolio: Over 400 holdings spread across various sectors and countries.
• Liquidity: High trading volume and tight bid-ask spread offer good liquidity.

Risks:

• High Volatility: High-yield bonds are more volatile than investment-grade bonds.
• Emerging Market Risk: Investing in emerging markets carries additional risks compared to developed markets.
• Interest Rate Risk: Changes in interest rates can negatively impact the value of the portfolio.

Who Should Consider Investing:

HYEM is suitable for investors seeking high current income and potential for capital appreciation. They should be comfortable with high volatility and emerging market risk.

AI-based Rating:

Fundamental Rating Based on AI: 7/10

HYEM receives a solid rating from the AI-based system. The rating considers the ETF's financial health, market position, and future prospects based on available data. The ETF benefits from an experienced management team, a diversified portfolio, and strong historical performance. However, the higher expense ratio and exposure to high volatility and emerging market risk are notable downsides.

Resources & Disclaimers:

Sources used for this analysis include VanEck website, ETF.com, Morningstar, and Bloomberg. This information should not be considered financial advice. Please consult a financial professional before making investment decisions.