From the June 2012 issue of Research Magazine • Subscribe!

Junk Bonds with Global Tilt

Van Eck Global introduced the Market Vectors International High Yield Bond ETF (IHY).

“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,” said Edward Lopez, Market Vectors’ marketing director. “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 in the U.S.”

IHY is comprised of below-investment-grade debt issued by corporations located throughout the world and may include emerging market countries. IHY is linked to the BofA Merrill Lynch Global ex-US Issuers High Yield Constrained Index. The fund charges net annual expenses of 0.40%

In other new ETF offerings, Van Eck Global introduced the Market Vectors International Fallen Angel High-Yield Bond ETF (NYSEArca: ANGL).  The fund owns corporate bonds that were rated investment grade at the time of their original issuance but which have since been downgraded below investment grade status.

ANGL is linked to the BofA Merrill Lynch US Fallen Angel High Yield Index and has a net annual expense ratio of 0.40%.

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