VanEck Emerging Markets High Yield Bond ETF

HYEM tracks an index that measures the performance of sub-investment-grade corporate debt from emerging markets.

Below-investment-grade bonds issued by companies in emerging markets are outperforming by a wide margin in 2024, based on a set of ETFs. HYEM's rally is also adding to leading the rally in US-based junk bonds.

High Yield Corporate Bonds In Emerging Markets Are Red Hot

Risk-tolerant investors searching for income and the potential for added upside with bonds have long turned to high-yield corporate debt and related ETFs. However, that focus has largely been limited to domestic offerings.

Encouraging Signs for This High-Yield Bond ETF

High-yield and high dividend investments through ETFs are preferred for preserving value. The increasing recession risks in the U.S. could favor a DCA strategy on emerging market high-yield bonds, unlike in the past. Fed rate cuts and dollar weakness could increase the demand for emerging market high yield bonds, and some data is already supporting this thesis.

HYEM: Is It Time To Accumulate Emerging Market High Yield Bonds?

Emerging market high-yield bonds offer the highest fixed-income yields in the market right now. HYEM is an index bond ETF focusing on these securities. Its dividend yield is a bit low at 6.0%, but it has a higher SEC yield and YTM. The fund is a solid investment choice, and has outperformed since my last coverage.

HYEM: Emerging Market High-Yield ETF, Above-Average 6.0% Dividend Yield, Strong Momentum

Virtus InfraCap U.S. Preferred Stock ETF

Simplify Interest Rate Hedge ETF

ProShares Inflation Expectations ETF

FolioBeyond Rising Rates ETF

Invesco Variable Rate Preferred ETF

2024 has been a tough year for most bond funds, as delayed rate hikes led to lower bond prices. Some bond ETFs have managed to outperform in spite of these tough conditions. These tend to focus on investments with low, sometimes negative, duration.

Best-Performing Bond ETFs For 2024

At a time of weakness for broad domestic fixed income strategies, many investors may be pensive about international bonds, let alone high-yield emerging markets corporates. That's understandable, but a deeper examination is merited because there is potential for pleasant surprises.

Hone in on HYEM for Strong Income

HYEM, a high-yield emerging market bond ETF, has rallied alongside U.S. junk bonds due to tightening credit spreads. The rapid issuance of EM bonds in 2024 suggests a frothy market, cautioning investors. EM credit spreads are near decade-long lows, limiting further upside potential.

HYEM: Frothy Markets Warrant Caution

Concerns about a potential debt crisis caused by foreign entities borrowing in dollars and causing financial distress and global contagion. The VanEck Emerging Markets High Yield Bond ETF (HYEM) is worth considering after a bout of global volatility and dislocation in credit markets. HYEM holds a diverse portfolio of high-yield bonds from various emerging markets, with a focus on sectors like finance, energy, and basic materials.

HYEM: A Good Emerging Market Bond Fund For After A Credit Dislocation

VanEck Fallen Angel High Yield Bond ETF

VanEck Vectors BDC Income ETF

VanEck China Bond ETF

Vaneck CLO ETF

VanEck Morningstar High Dividend ETF

VanEck Energy Income ETF

VanEck J.P Morgan EM Local Currency Bond ETF

VanEck Investment Grade Floating Rate ETF

VanEck Green Bond ETF 

VanEck High Yield Muni ETF

VanEck International High Yield Bond ETF 

VanEck Dynamic High Income ETF

VanEck Vectors Intermediate Muni ETF

VanEck Vectors Muni Allocation ETF

Mobeus Income & Growth 2 VCT PLC

VanEck Vectors Long Muni ETF

VanEck Mortgage REIT Income ETF

VanEck Preferred Securities ex Financials ETF

VanEck Short High Yield Muni ETF

VanEck Vectors Short Muni ETF

VanEck HIP Sustainable Muni ETF

VanEck CEF Municipal Income ETF 

Yields have reset higher across fixed income markets, leaving bonds well positioned in a range of different economic and interest rate scenarios in 2024. Introduction to Income Investing Income investing is a strategy that aims to generate a steady stream of income from investments, typically through interest payments or dividends.

Income Investing Playbook 2024: Navigating the New Interest Rate Regime

Domestic aggregate bond strategies are on pace for decent showings this year. And there is mounting speculation that the Federal Reserve will lower interest rates next year, perhaps multiple times.

Emerging Market Bonds Could Be 2024 Fixed Income Winners

HYEM offers investors a 6.5% yield and prospective dividend growth from higher rates. Total returns have been quite good for the past year, and dividend growth is mediocre. An overview of VanEck Emerging Markets High Yield Bond ETF follows.

HYEM: Emerging Markets High-Yield Bond ETF, 6.5% Yield, Recent Outperformance

On July 26, the Federal Reserve boosted interest rates by 25 basis points to the highest levels in 22 years while indicating that at least one more rate hike could be on the table this year. The 11th rate increase since March 2022 could imply that the central bank remains concerned about inflation.

When It Comes to Bonds, Emerging Markets Have the Edge

The VanEck Emerging Markets High Yield Bond ETF offers exposure to emerging market companies rated as junk, without currency risk. The fund is not a buy-and-hold vehicle but a cyclical play. With rates at historic highs, this name is now attractive. The ETF has a similar Sharpe ratio and Standard Deviation when compared to the U.S.- focused fund JNK.

HYEM: 9% Yield From Emerging Markets Debt

HYEM owns a portfolio of high yield bonds in the emerging markets. High yield bonds in HYEM's portfolio have higher average default rates than investment grade bonds and this can result in price declines in the long run.

HYEM: Not The Right Time To Buy

Interest rate hikes have caused bond prices to plummet, and for bond fund dividends to rise. Bond funds are offering strong yields, some more than others.

HYEM: Emerging Markets High Yield Bond Index ETF, Above-Average 6.6% Yield, Expected Dividend Growth

With domestic fixed income offerings faltering at the hands of the Federal Reserve's six interest rate increases, investors are understandably apprehensive about U.S. bonds. Add emerging markets to the mix and the jitters are likely to increase.

EM Junk Bonds Offer Pleasant Perks

Since my last article on HYEM, the strategy delivered poor returns, while some of the risks previously discussed have materialized. Dollar scarcity continues to be the key risk factor for HYEM in the future.

HYEM And The Impact Of The Dollar Wrecking Ball

At a time of rising interest rates in the U.S. and in some developing economies, fixed income investors may not be thinking of emerging markets debt.

These Corporate Bonds Offer Surprising Benefits

American Century Emerging Markets Bond ETF

Invesco BulletShares 2022 USD Emerging Markets Debt ETF

Invesco BulletShares 2023 USD Emerging Markets Debt ETF

Invesco BulletShares 2024 USD Emerging Markets Debt ETF

iShares J.P. Morgan EM Corporate Bond ETF

SPDR Bloomberg Emerging Markets Local Bond ETF

Morgan Stanley Emerging Markets Domestic Debt Fund Inc

Virtus Stone Harbor Emerging Markets Income Fund 

Stone Harbor Emerging Markets Total Income Fund

WisdomTree Emerging Markets Local Debt Fund

VanEck Vct Emrg Shs

iShares JP Morgan USD Emerging Markets Bond ETF

Global X Emerging Markets Bond ETF 

WisdomTree Emerging Markets Corporate Bond Fund

Western Asset Emerging Markets Debt Fund

iShares Emerging Markets High Yield Bond ETF

SPDR DoubleLine Emerging Markets Fixed Income ETF

First Trust Emerging Markets Local Currency Bond ETF

JPMorgan USD Emerging Markets Sovereign Bond ETF

KraneShares Asia Pacific High Yield Bond ETF

iShares J.P. Morgan EM Local Currency Bond ETF

Morgan Stanley Emerging Markets Debt Fund

Invesco Emerging Markets Sovereign Debt ETF

Franklin Templeton Emerging Markets Income Fund

Vanguard Emerging Markets Government Bond ETF

In emerging markets valuations look attractive today after the losses across financial markets early this year. PIMCO's investment process is founded upon our macroeconomic outlook and our in-house country and credit research.

Spotting Opportunities And Risks Across The EM Investment Universe

I believe concerns surrounding a potential EM debt crisis are real and should be seriously considered by investors before purchasing HYEM. Despite the attractive yield, there are several risks such as unexpected higher inflation or a global recession that could impair the long-term performance of HY EM bonds.

HYEM: The Risks Of An Emerging Market Debt Crisis Are Real

With emerging markets stocks and bonds of nearly all stripes, foreign and domestic, wilting as the Federal Reserve hikes interest, emerging markets bonds may seem like a bridge too far for many investors. Boil it down to emerging markets corporate debt and many fixed income investors are likely to take a pass in this environment.

Surprising Bond Segment Can Help Shell-Shocked Fixed Income Investors

Fidelity Total Bond ETF

iShares TIPS Bond ETF

Vanguard Tax-Exempt Bond Index ETF

Vanguard Ultra Short-Term Bond ETF

Coming up with a list of the best bond ETFs for 2022 may at first seem like it would include only funds that can perform well in an inflationary, rising-rate environment. But this would only be partially correct.

5 Best Bond ETFs for 2022

In the wake of Russia's invasion of Ukraine, Western nations levied punitive economic sanctions against Russia, making the country's financial markets essentially off-limits to major investment banks, index providers, and fund issuers. One of the results of those sanctions is significant reductions and, in some cases, outright eliminations of Russian securities in an array of [.

How Russia Reductions Will Affect EM Bond ETFs

Even with the Federal Reserve poised to soon raise interest rates, the income environment in the U.S. remains challenging. However, yield-hungry investors can find pleasant surprises with some asset classes they may not be thinking of.

These EM Bonds Offer Sturdy Income

iShares Core U.S. Aggregate Bond ETF

iShares iBoxx High Yield Corporate Bond ETF

With rates rising in the U.S., investors should consider looking abroad for bond exposure.

News for VanEck Emerging Markets High Yield Bond ETF ETF (HYEM)