Market Vectors launches International High Yield Bond ETF

By Susanna Moon

Chicago, April 3 - Market Vectors ETF Trust said it launched its International High Yield Bond ETF, which seeks to replicate as closely as possible the price and yield performance of the Bank of America Merrill Lynch Global Ex-U.S. Issuers High Yield Constrained Index.

The fund addresses a segment of the high-yield bond market that is believed to be underrepresented in many investor portfolios, according to a press release by Market Vectors.

The High Yield Constrained index is composed of below investment-grade debt issued by corporations located outside the United States, which may include emerging market countries. As of March 27, 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.

"Our research 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," Edward Lopez, Market Vectors' marketing director, said in the release.

"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 U.S."

Market Vectors ETFs are distributed by Van Eck Global, a money manager based in New York.

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