Market Vectors’ international high-yield corporate bond portfolio
manager Fran
Rodilosso today commented on the supply and demand dynamics that
have been at work in the emerging markets high yield corporate debt
space since the start of the second quarter.
“Part of the performance story for emerging markets debt this year goes
beyond the relatively strong underlying fundamentals,” noted
Rodilosso. “Growing demand for investments outside of the U.S. and
Eurozone has been met with supply interruptions mainly caused by fallout
from the European debt crisis. The impact has been mainly on the high
yield space, despite the solid performance of the secondary market.”
“While the first half of this year saw record-paced issuance from
emerging markets companies, the second quarter witnessed less new
supply, particularly from sub-investment grade borrowers,” continued
Rodilosso. “High yield issuance in emerging markets in 2012 is, in fact,
some $30 billion below where it was through the first seven months of
2011.”
Rodilosso also mentioned that he is beginning to see some new high yield
issues come to market, even though late July is traditionally a slower
time of year for new issuances. “I would expect any reasonably priced
emerging markets high yield new issues to do very well in this
environment,” he added.
Mr. Rodilosso, who joined the Market Vectors team earlier this year, has
more than 20 years of senior level experience in emerging markets,
high-yield debt research and portfolio management. He currently manages
three Market Vectors high-yield corporate bond ETFs, Fallen
Angel High Yield Bond ETF (NYSE Arca: ANGL), International
High Yield Bond ETF (NYSE Arca: IHY) and Emerging
Markets High Yield Bond ETF (NYSE Arca: HYEM).
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About Market Vectors ETFs
Market Vectors exchange-traded products have been offered since 2006 and
span many asset classes, including equities, fixed income (municipal and
international bonds) and currency markets. The Market Vectors family
currently totals $23.6 billion in assets under management, making it the
fifth largest ETP family in the U.S. and eighth largest worldwide as of
June 30, 2012.
Market Vectors ETFs are sponsored by Van Eck Global. Founded in 1955,
Van Eck Global was among the first U.S. money managers helping investors
achieve greater diversification through global investing. Today, the
firm continues this tradition by offering innovative, actively managed
investment choices in hard assets, emerging markets, precious metals
including gold, and other alternative asset classes. Van Eck Global has
offices around the world and manages approximately $32 billion in
investor assets as of June 30, 2012.
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. The Funds'
underlying securities may be subject to call risk, which may result in
the Funds having to reinvest the proceeds at lower interest rates,
resulting in a decline in the Funds' income.
The Funds, as they invest in high yield securities, may also be subject
to a greater risk of loss of income and principal than higher rated
securities. 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 prices of high yield securities are likely to be more
sensitive to adverse economic changes or individual issuer developments
than higher rated securities. The secondary market for high yield
securities may be less liquid than the market for higher quality
securities and, as such, may have an adverse effect of market prices of
certain securities. As the Fund may invest in securities denominated in
foreign currencies and some of the income received by the Fund will be
in foreign currency, changes in currency exchange rates may negatively
impact the Fund’s 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. Investors should be willing to accept a high
degree of volatility and the potential of significant loss. For a more
complete description of these and other risks, please refer to
the Fund’s prospectus and summary prospectus. The Fund may loan its
securities, which may subject it to additional credit and counterparty
risk.
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Investors should not expect to buy or sell shares at NAV. Total returns
are based upon closing “market price” (price) of the ETF on the dates
listed.
Fund shares are not individually redeemable and will be issued and
redeemed at their 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.
Investing involves substantial risk and high volatility, including
possible loss of principal. Bonds and bond funds will decrease in value
as interest rates rise. An investor should consider the
investment objective, risks, charges and expenses of the Fund carefully
before investing. To obtain a prospectus and summary prospectus, which
contain this and other information, call 888.MKT.VCTR or visit
vaneck.com/etf. Please read the prospectus
and summary
prospectus carefully before investing.
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