RODILOSSO: While emerging markets still have lower debt-to-GDP ratios than
developed markets, the emerging markets bond universe is still becoming an
increasingly important part of the global debt universe. That universe has
shifted in terms of its make-up over the last three, five, and 10 years.
Corporate debt has become a much more important part of the universe, and even
more significantly, so has local currency debt.
EMAG, Market Vectors Emerging Markets Aggregate Bond ETF; it's a fixed-income
ETF that seeks to track the performance and yield of the Market Vectors EM
Aggregate Bond Index (MVEMAG). The Market Vectors EM Aggregate Bond Index is
comprised of sovereign and corporate hard currency and local currency debt. It
encompasses the broad opportunity set within the emerging markets
EMAG is the first ETF to offer comprehensive exposure to the emerging markets
fixed-income universe. There are many ETFs in the marketplace today that offer
exposure to various parts of the emerging markets universe. But, for
investors who would like a mix of sovereign and corporate local and hard
currency, EMAG offers a unique opportunity to capture all that exposure
through one investment.
To give you a perspective on the level of diversification within EMAG’s
underlying Index, there are more than 600 issuers from over 60 countries, with
bonds denominated in over twenty currencies.
November 30, 2013, the Market Vectors EM Aggregate Bond Index is approximately
50% local currency and 50% hard currency. Approximately 70% of the issuers in
the Index are also rated by at least one agency as investment-grade issuers.
Interestingly as well, 35% of the Index are hard currency corporate issuers;
37% overall corporate. Only 18% of the Index, as of November 30, 2013, is
represented by hard currency sovereign bonds. This is significant because a
lot of the money benchmarked to EM debt today is benchmarked largely to the
EM hard currency sovereign debt universe, which is a shrinking component of
EM, as it has been for the last decade. As for the local currency
corporate component of the Index, it is less than 2% of the Index.
However, we believe that local currency corporate debt within emerging
markets will become an increasingly significant part of the
No assembly required
EMAG offers a way for investors to gain broad exposure to emerging markets
fixed-income, both hard currency and local currency, in their
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Market Vectors EM Aggregate Bond Index is comprised of sovereign bonds and
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Vectors EM Aggregate Bond Index (the “Index”) is the exclusive property of
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International and Emerging Markets Risk Factors: Fixed income
securities are subject to credit risk and interest rate risk. High yield bonds
may be subject to greater risk of loss of income and principal and are likely
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greater market volatility, the availability of less reliable financial
information, higher transactional and custody costs, taxation by foreign
governments, decreased market liquidity and political instability. Changes
in currency exchange rates may negatively impact the Fund’s return.
Investments in emerging markets securities are subject to elevated risks
which include, among others, expropriation, confiscatory taxation, issues
with repatriation of investment income, limitations of foreign ownership,
political instability, armed conflict and social instability. Investors
should be willing to accept a high degree of volatility and the potential of
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