US asset manager Van Eck Global has launched an ETF providing exposure to bonds issued in local currencies by emerging market governments.
The Market Vectors Emerging Markets Local Currency Bond, which has a gross expense ratio of 0.60%, is designed to replicate the JP Morgan Government Bond Index-Emerging Markets Global Core benchmark, which comprises 171 bonds.
These constituent bonds have maturities ranging form one to 30 years and have an average yield-to-maturity of 6.8%, as of July 1, 2010.
The index consists of a range of bonds issued in local currencies by 13 emerging market countries across Latin America, Eastern Europe, Africa and Asia.
The benchmark is market-cap weighted, with individual country exposures capped at 10% to ensure diversification.
As of July 1, the index comprises Brazil, Malaysia, Mexico, Poland, South Africa and Thailand. The index rebalancing will occur monthly.
Van Eck Global principal Jan Van Eck says the ETF allows investors to participate in the local emerging market economies, which include the potential for currency appreciation and higher yields relative to developed countries.
The latest fund boosts Van Eck's range to 26 ETFs. The firm also offers equity ETFs including the Africa Index ETF, Brazil Small-Cap, Egypt Index ETF and Latin America Small-Cap Index ETF.
Van Eck has around $14.5bn in assets under management in its ETF range, as of June 30.
JP Morgan, as a provider of emerging market indices, has around $80bn benchmarked to its GBI-EM index family, as of June 23.
‘Most significant’ upgrade since launch
Changes happening over coming months
Had accepted British Steel business
Aimed at HNW clients and family groups
Set for 1 April 2019