Broaden your income horizon

 


In another Australian first, investors can now invest in a fully transparent, ASX-listed, actively managed fund of emerging markets bonds. VanEck Emerging Income Opportunities Active ETF (Managed Fund) (ASX: EBND) gives you one-trade access to VanEck’s emerging markets debt investment prowess.

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The “new world” of emerging markets bonds

Emerging markets bonds are, as the name suggests, bonds issued by governments and companies in emerging markets. Despite emerging markets representing over 50% of global GDP, the level of EM bond issuance and investment is nowhere near what would be implied by their contribution to global growth.

Additionally, many emerging markets boast strong economic performance based on good economic policy decision making in the last 15 years, which has made them stronger than many of their developed market counterparts.

There is a new world order and emerging markets bonds are at the forefront of this change.


The income opportunity with emerging markets bonds

Most investors are missing this mainstream asset class because of a misconception of emerging markets. EM bonds have produced positive returns in 14 of the last 15 years.

With Australian and global developed markets bond yields extremely low, the higher yields available from emerging markets bonds provide investors with the potential for higher income with some additional risk, but still well below the risk of Australian and international equities.

EBND will have a targeted yield of 5% p.a.*


The first active emerging markets bond fund on ASX

Australian investors have also been missing out on the emerging markets opportunity simply due to lack of access. Until now.

EBND provides investors with a globally diversified portfolio of emerging markets bonds via a single trade on ASX.


The EBND advantage

We believe that to take full advantage of the opportunities within the EM bonds universe, it is necessary to take an unconstrained active approach to bond selection, to avoid having the highest weighting to the most indebted, poorly run nations.

EBND therefore takes an unconstrained approach and invests in bonds that offer the best value relative to their fundamentals while managing risk. VanEck’s unconstrained approach offers a number of benefits including:

  • An actively managed strategy with a high conviction portfolio result;
  • Greater diversification than approaches limited by an index or by currency;
  • An “bottom-up” and fundamentally research driven process; and
  • Potentially higher monthly income.


Invest with the experts

The depth and breadth of VanEck’s emerging markets expertise is unparalleled.

  • VanEck has been investing in emerging markets for almost three decades.
  • The Emerging Markets Investment Team has an average of more than 20 years’ investing experience each, across a variety of market conditions and economic cycles. 
  • VanEck manages in excess of US$5.4 billion* in emerging markets fixed income.


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* Each month the Responsible Entity of the Fund (‘the RE’) will determine the cash amount of the dividend to be paid in the best interests of investors, taking into account all relevant factors including the Fund’s investment objective and its economic performance. In determining each month’s dividend the RE will target an annual dividend yield of 5% of the capital invested at the beginning of the period. From time to time the RE may amend this target in the best interests of investors.

Disclaimer: This information is issued by VanEck Investments Limited ABN 22 146 596 116 AFSL 416755 as the responsible entity of the VanEck Emerging Income Opportunities Active ETF (Managed Fund) (‘EBND’). This is general information about financial products and not personal financial advice. It does not take into account any person’s individual objectives, financial situation or needs. Before making an investment decision, you should read the PDS and with the assistance of a financial adviser consider if it is appropriate for your circumstances. The PDS is available at www.vaneck.com.au or by calling 1300 68 38 37. EBND invests in emerging markets which have specific and heightened risks that are in addition to the typical risks associated with investing in the Australian bond market. The PDS contains details of the key risks. No member of the VanEck group guarantees the repayment of capital, the payment of income, performance, or any particular rate of return from EBND.

Published: 17 February 2020