Van Eck Global today marked three years of live trading for three of its fixed income ETFs: Market Vectors® Fallen Angel High Yield Bond ETF (NYSE Arca: ANGL), Market Vectors® International High Yield Bond ETF (NYSE Arca: IHY) and Market Vectors® Emerging Markets High Yield Bond ETF (NYSE Arca: HYEM). In celebration of this milestone, Van Eck will ring The Opening Bell® at the New York Stock Exchange this morning.
“The high yield bond universe is fast-moving and fast-changing. We feel it is important for investors to have the tools they need to add diversification in this space,” said Fran Rodilosso, Senior Investment Officer and Portfolio Manager for Market Vectors Fixed Income ETFs. “We believe that all three of these funds have been valuable tools for adding diversification. They have also given investors more choice in assessing risk versus reward within the global high yield space. We are very pleased to be marking their three-year anniversary.”
Rodilosso went on to share some thoughts about the current state of the high yield space, noting that, in his view, high yield fundamentals can withstand higher short-term rates, especially if rising rates are associated with a concurrent increase in global growth.
“Given the still-murky outlook for both growth and interest rates, fallen angels1 may offer a unique value proposition in that they have historically outperformed the broader high yield market in a variety of environments – rising and falling rates, as well as rising and narrowing spreads,” he continued. “In fact, in all three years of ANGL’s existence, its underlying index, the BofA Merrill Lynch US Fallen Angel High Yield Index2, has performed better than the broad high yield market3.”
IHY and HYEM also provide unique opportunities for diversification. “IHY is something of a ‘barbell,’ by which I mean its index pairs high credit quality and lower yields out of Europe with more volatile emerging market issuances,” said Rodilosso. “HYEM is focused solely on the emerging market high yield landscape, the highest yielding part of the global credit universe, though its credit profile has compared favorably with the non-emerging markets3.”
Van Eck notes that investing in high yield debt is not without risks, including the sensitivity to adverse economic changes, individual issuer developments, liquidity concerns, fluctuations in prices due to interest rate changes, among others.
All three funds also received 5-star ratings from Morningstar after reaching their respective three-year anniversaries. More information on ANGL, IHY, HYEM and the other fixed income ETFs offered by Van Eck Global through its Market Vectors ETF family can be found at www.thinkyield.com.
1 Fallen Angels: Corporate bonds that were investment grade at the time of issuance but have subsequently been downgraded to below investment grade.
2 BofA Merrill Lynch US Fallen Angel High Yield Index: is comprised of below investment grade corporate bonds denominated in U.S. dollars, issued in the U.S. market and that were rated investment grade at the time of issuance.
3 BofA Merrill Lynch US High Yield Index: is comprised of U.S. dollar denominated below investment grade corporate debt publicly issued in the U.S. domestic market.
Index returns are not representative of fund returns. Fund returns are available at vaneck.com.
Morningstar ratings: ©2015 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. For each fund with at least a three-year history, Morningstar calculates a Morningstar RatingTM based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.) The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Rating metrics. As of May 31, 2015, ANGL was rated against 603 high yield bond funds, IHY was rated against 309 world bond funds, and HYEM was rated against 231 emerging markets bond funds over the last three years. ANGL, IHY, and HYEM received a Morningstar Rating of 5 stars for 3-year rating. Past performance is no guarantee of future results.
About Van Eck Global
Founded in 1955, Van Eck Global was among the first U.S. money managers to help investors achieve greater diversification through global investing. Today, the firm continues this tradition by offering innovative investment choices in specialized asset classes such as hard assets, emerging markets, and precious metals including gold. Van Eck offers a broad array of Market Vectors ETFs spanning broad-based and specialized asset classes, and is one of the largest providers of ETPs in the U.S. and worldwide. The firm has offices around the world and managed approximately $30.5 billion in investor assets as of March 31, 2015.
An investment in the Funds may be subject to risk which include, among others, credit risk, call risk, and interest rate risk, all of which may adversely affect the Funds. High yield bonds may be subject to greater risk of loss of income and principal and are likely to be more sensitive to adverse economic changes than higher rated securities. International investing involves additional risks which include greater market volatility, the availability of less reliable financial information, higher transactional and custody costs, taxation by foreign governments, decreased market liquidity and political instability. Changes in currency exchange rates may negatively impact the Funds' return. Investments in emerging markets securities are subject to elevated risks which include, among others, expropriation, confiscatory taxation, issues with repatriation of investment income, limitations of foreign ownership, political instability, armed conflict and social instability. The Funds’ assets may be concentrated in a particular sector and may be subject to more risk than investments in a diverse group of sectors.
Merrill Lynch, Pierce, Fenner & Smith Incorporated and its affiliates ("BofA Merrill Lynch") indices and related information, the name "BofA Merrill Lynch", and related trademarks, are intellectual property licensed from BofA Merrill Lynch, and may not be copied, used, or distributed without BofA Merrill Lynch's prior written approval. The licensee's products have not been passed on as to their legality or suitability, and are not regulated, issued, endorsed, sold, guaranteed, or promoted by BofA Merrill Lynch. BOFA MERRILL LYNCH MAKES NO WARRANTIES AND BEARS NO LIABILITY WITH RESPECT TO THE INDICES, ANY RELATED INFORMATION, ITS TRADEMARKS, OR THE PRODUCT(S) (INCLUDING WITHOUT LIMITATION, THEIR QUALITY, ACCURACY, SUITABILITY AND/OR COMPLETENESS).
There are risks involved with investing in ETFs, including possible loss of money. Shares are not actively managed and are subject to risks similar to those of stocks, including those regarding short selling and margin maintenance requirements. Ordinary brokerage commissions apply. Debt securities carry interest rate and credit risk. Interest rate risk refers to the risk that bond prices generally fall as interest rates rise and vice versa. Credit risk is the risk of loss on an investment due to the deterioration of an issuer's financial health. Investments in foreign and emerging markets securities may be subject to elevated risks which may negatively impact the Funds.
Fund shares are not individually redeemable and will be issued and redeemed at their Net Asset Value (NAV) only through certain authorized broker-dealers in large, specified blocks of shares called “creation units” and otherwise can be bought and sold only through exchange trading. Creation units are issued and redeemed principally in kind. Shares may trade at a premium or discount to their NAV in the secondary market.
Diversification does not assure a profit nor does it protect against a loss.
Investing involves substantial risk and high volatility, including possible loss of principal. Bonds and bond funds, in general, will decrease in value as interest rates rise. An investor should consider the investment objective, risks, charges and expenses of the Funds carefully before investing. To obtain a prospectus and summary prospectus, which contain this and other information, call 888.MKT.VCTR or visit marketvectorsetfs.com. Please read the prospectuses and summary prospectuses carefully before investing.
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