Daily ETF Watch: VanEck Plans Bond Fund

Proposed EM bond fund targets very specific subset of the fixed-income space.

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Reviewed by: Heather Bell
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Edited by: Heather Bell

VanEck has filed for an emerging market bond ETF that will target sovereign and quasi-sovereign bonds that are rated as investment grade or just below investment grade (BB). The Market Vectors EM Investment Grade + BB Rated USD Sovereign Bond ETF (IGEM) will track the J.P. Morgan Custom EM Investment Grade Plus BB-Rated Sovereign USD Bond Index.

Eligible components must also be denominated in U.S. dollars and have at least $750 million outstanding.

As a result of its requirements, as of March 31, the fund’s underlying index included 267 bonds from 67 issuers in 30 different emerging markets. The filing noted that the index’s weighted average maturity was slightly more than 12 years.

The filing did not include an expense ratio.

VanEck has a few emerging market bond ETFs, but this latest filing seems designed as a complement to the Market Vectors J.P. Morgan EM Local Currency Bond ETF (EMLC | C-54), which launched in 2010 and has some $1.5 billion in assets under management.

Contact Heather Bell at [email protected].

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.