Broaden your income horizon
In another Australian first, investors can now invest in a fully transparent, ASX-listed, actively managed fund of emerging markets bonds. VanEck Emerging Income Opportunities Active ETF (Managed Fund) (ASX: EBND) gives you one-trade access to VanEck’s emerging markets debt investment prowess.
The “new world” of emerging markets bonds
Emerging markets bonds are, as the name suggests, bonds issued by governments and companies in emerging markets. Despite emerging markets representing over 50% of global GDP, the level of EM bond issuance and investment is nowhere near what would be implied by their contribution to global growth.
Additionally, many emerging markets boast strong economic performance based on good economic policy decision making in the last 15 years, which has made them stronger than many of their developed market counterparts.
There is a new world order and emerging markets bonds are at the forefront of this change.
The income opportunity with emerging markets bonds
Most investors are missing this mainstream asset class because of a misconception of emerging markets. EM bonds have produced positive returns in 14 of the last 15 years.
With Australian and global developed markets bond yields extremely low, the higher yields available from emerging markets bonds provide investors with the potential for higher income with some additional risk, but still well below the risk of Australian and international equities.
EBND will have a targeted yield of 5% p.a.*
The first active emerging markets bond fund on ASX
Australian investors have also been missing out on the emerging markets opportunity simply due to lack of access. Until now.
EBND provides investors with a globally diversified portfolio of emerging markets bonds via a single trade on ASX.
The EBND advantage
We believe that to take full advantage of the opportunities within the EM bonds universe, it is necessary to take an unconstrained active approach to bond selection, to avoid having the highest weighting to the most indebted, poorly run nations.
EBND therefore takes an unconstrained approach and invests in bonds that offer the best value relative to their fundamentals while managing risk. VanEck’s unconstrained approach offers a number of benefits including:
- An actively managed strategy with a high conviction portfolio result;
- Greater diversification than approaches limited by an index or by currency;
- An “bottom-up” and fundamentally research driven process; and
- Potentially higher monthly income.
Invest with the experts
The depth and breadth of VanEck’s emerging markets expertise is unparalleled.
- VanEck has been investing in emerging markets for almost three decades.
- The Emerging Markets Investment Team has an average of more than 20 years’ investing experience each, across a variety of market conditions and economic cycles.
- VanEck manages in excess of US$5.4 billion* in emerging markets fixed income.
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Published: 17 February 2020