VanEck International High Yield Bond ETF (ARCA: IHY)

VanEck International High Yield Bond ETF (ARCA:IHY), Quote.Headers.trade-ideas

VanEck International High Yield Bond ETF

VanEck Vectors International High Yield Bond

The fund normally invests at least 80% of its total assets in securities that comprise the funds benchmark index. The index is comprised of below investment grade bonds issued by corporations located throughout the world (which may include emerging market countries) excluding the United States denominated in Euros, U.S. dollars, Canadian dollars or pound sterling and issued in the major domestic or Eurobond markets.

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PIMCO CIO Daniel Ivascyn warns of a potential economic downturn in the UK next year. Bond yields have already dropped significantly, and investors in the iShares MSCI United Kingdom ETF should monitor developments.

PIMCO CIO Warns Of &#39;Hard Landing&#39; For UK Economy

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PIMCO CIO Daniel Ivascyn warned there is a strong chance of a significant economic downturn in the U.K. next year. 
"We do think there's potentially more hard landing risks,&#8221; said Ivascyn. &#8220;The U.S. economy has proven to be surprisingly resilient in 2023, but the U.K. and Europe risk a <a href="https://www.benzinga.com/news/global">more significant deterioration</a>.&#8221;
Ivascyn was betting more on U.K. government bonds than U.S. ones because he believed the U.K. would experience more economic hardship, as <a href="https://www.ft.com/content/a2e7787a-d64c-46ab-9b6f-62897a547616">reported</a> by the Financial Times.
The U.K. economy unexpectedly contracted in October, falling by 0.3% following a 0.2% growth in September. The Bank of England revised its prediction for economic growth in the fourth quarter to flat from 0.1 earlier, citing lower household spending as one of the reasons.
A weaker economic outlook typically pulls bond yields down, thereby generating strong returns for bondholders. Since late October, U.K. government bond yields — which move inversely to prices — have already dropped significantly, with benchmark 10-year yields falling by a full percentage point to roughly 3.7%.
A weakening economy also impacts equity negatively. Investors in the iShares MSCI United Kingdom ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/EWU#NYSE">EWU</a>) should keep track of economic developments coming from the UK area.
Also Read: <a href="https://www.benzinga.com/news/23/12/36046619/can-robinhood-shake-up-the-uk-trading-scene-with-its-commission-free-model">Can Robinhood Shake Up the UK Trading Scene with Its Commission-Free Model?</a>
&#8220;Global bond investing is back. It's the first time in a long time we've been excited about value and relative value in the U.K., Europe and Japan,&#8221; exclaimed Ivascyn. The Invesco International Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PICB#NYSE">PICB</a>) tracks European bonds. The Invesco Global ex-US High Yield Corporate Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PGHY#NYSE">PGHY</a>), the Simplify Opportunistic Income ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CRDT#NYSE">CRDT</a>) and the VanEck International High Yield Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IHY#NYSE">IHY</a>) help investors get exposure to international bonds.
The U.S. economy has continued to develop, in sharp contrast to the pessimistic forecasts for the U.K. and the eurozone. The U.S. equity-tracking SPDR S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) has returned 24.35% to investors over the past year, compared to iShares MSCI United Kingdom ETF, which has returned 8.85%.
Check Out: <a href="https://www.benzinga.com/money/best-online-brokers-for-bonds">Best Online Brokers for Bonds</a>

PIMCO CIO Warns Of 'Hard Landing' For UK Economy

An interesting trend pertaining to high-yield bond ETFs started last year. That being whenever the iShares iBoxx $ High Yield Corporate Bond Fund (NYSE: <a class="ticker" href="/stock/hyg#NYSE">HYG</a>) or the SPDR Barclays High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/jnk#NYSE">JNK</a>) experienced outflows, it was interpreted as a sign that investors were altogether fleeing junk bonds.

	Inflows to at least two other ETFs prove that is far from being accurate. Market Vectors announced its Market Vectors International High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/ihy#NYSE">IHY</a>) has surpassed the $200 million in assets under management level. As of April 15, IHY had $260 million in AUM, <a href="http://vaneck.com/funds/IHY.aspx">according to Market Vectors data</a>.

	That is an impressive haul given that junk bond ETFs have been left for dead by some in the mainstream financial press on multiple occasions in recent months. IHY's asset-gathering ability is also noteworthy given that the ETF is a mere 54 weeks old.

	"The recent flows that we have seen suggest that investors are not giving up on bonds, but they are making a significant change in how they allocate to the asset class," said Market Vectors portfolio manager Fran Rodilosso in a statement. "Short-term high-yield, emerging markets credit and floating rate funds have gained significant assets during the quarter. At the same time, some U.S.-centric high-yield ETFs have seen fairly large outflows."

	IHY has an average modified duration of 4.16 years, a yield to worst of 5.34 percent and average yield to maturity of 5.94 years. The ETF, which is home to 358 holdings, has a 30-day SEC yield of 5.09 percent. IHY's top-five country weights are the U.K., France, Germany, Canada and Italy.

	Another Market Vectors junk bond ETF that recently topped the $200 million AUM level is the Market Vectors Emerging Markets High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/hyem#NYSE">HYEM</a>). Inflows to HYEM have arguably been stunning. The fund had <a href="http://www.benzinga.com/markets/bonds/13/04/3493835/bond-etfs-mixed-ahead-of-venezuela-election">just $27 million in assets in late December</a>, but that number surged to $236.1 million as of April 15.

	"Currently, high yield is already shorter duration than investment grade debt on average," said Rodilosso. "Many investors remain more comfortable with credit risk than they are with interest rate duration risk, as evidenced by continuing demand for high yield in general."

	Inflows to HYEM are made all the impressive when realizing the ETF is not even a year old. The fund has an average modified duration of 4.47 years, an average yield to worst of 6.08 percent and an average yield to maturity of 6.42 percent.

	HYEM has a 30-day SEC yield of 5.6 percent. The fund's five largest country weights are China, Russia, Mexico, Indonesia and Venezuela. Over 87 percent of HYEM's 212 holdings are rated BB or B. Both ETFs have annual expense ratios of 0.4 percent.

	For more on bond ETFs, click <a href="http://www.benzinga.com/markets/bonds/13/04/3493835/bond-etfs-mixed-ahead-of-venezuela-election">here</a>.

Observers of the exchange-traded products industry know that 2012 has been long on closures, 99 to be a precise -- a record. They also know that new fund listings have reached "just" over 160 <a href="http://online.wsj.com/article/SB10001424127887323713104578133391130341574.html">according to Lipper data;</a> the slowest pace in several years.

However, an argument can be made that, broadly speaking, the lack of new ETF quantity has been made up for in terms of quality. Said another way, while a fair amount of 2012's new ETFs have niche focuses, many have investment objectives that are easy to understand and are not as opaque as some critics would like to believe. 

The good news for investors is that the straight forward investment objectives combined with <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/12/3152390/these-90-day-old-etfs-are-doing-just-fine">quick success in terms of asset-gathering and performance</a> bodes well for some of these ETFs on two levels. First, they could be equally if not more successful next year. Second, many of 2012's new ETFs look destined to be around for a while and not head to the ETF graveyard.

With that here is a review of some of the best new ETFs of 2012. Here, "best" means a combination of understandable investment objectives, asset-gathering proficiency and performance. Please not all of the successful new product launches of 2012 are included here.

PIMCO Total Return Exchange-Traded Fund (NYSE: <a class="ticker" href="/stock/bond#NYSE">BOND</a>)
There is not much more praise that can be heaped upon the Bill Gross ETF. Following its February 29 inception date, BOND is on track to haul in $4 billion in assets. BOND is already the largest actively managed ETF and the ETF has delivered the goods in terms of performance since its debut. In fact, it has been better than the Total Return Mutual Fund, the world's largest bond fund. By returns, AUM and ease of understanding what this ETF tries to do, BOND has impressed. There is no arguing that.

iShares MSCI Global Select Metals &amp; Mining Producers Fund (NYSE: <a class="ticker" href="/stock/pick#NYSE">PICK</a>)
On the basis of performance, PICK has been lousy as it has tumbled about 18 percent since its early February debut. That is not because this ETF is a bad idea. PICK's woes are attributable to not enough of 2012 being a risk on year. Investors have been worried about the Chinese economy, the fiscal cliff and a myriad of other issues that have hamstrung materials stocks.

PICK does deserve some credit for entering a crowded field (there is no shortage of equity-based mining ETFs) and proving adept at attracting assets. The fund has nearly $236 million and if 2013 brings a risk on flair, PICK could soar.

WisdomTree China Dividend Ex-Financials Fund (NASDAQ: <a class="ticker" href="/stock/chxf#NASDAQ">CHXF</a>)
The WisdomTree China Dividend Ex-Financials Fund is another ETF that entered an arena fraught with competition. There are hundreds of ETFs that offer some exposure to China, and in terms of China-specific funds, that universe is dominated by the iShares FTSE China 25 Index Fund (NYSE: <a class="ticker" href="/stock/fxi#NYSE">FXI</a>).

In other words, any new China-specific ETF that comes to market these days had better offer up something unique or risk being passed over in favor of more familiar fare. CHXF is unique. Not only does the fund feature a lower expense ratio than FXI, it excludes Chinese bank stocks in favor of Chinese equities with better dividend reputations. Up almost eight percent since its September debut, CHXF is straightforward in its approach and has accumulated $29.4 million in assets.

SPDR Barclays Short Term High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/sjnk#NYSE">SJNK</a>)
For all the attention being paid to <a href="http://www.benzinga.com/markets/bonds/12/11/3090840/not-all-junk-bond-etfs-suffering-outflows">outflows from large, longer duration junk bond ETFs</a>, SJNK is off to a banner start on the AUM front. Since its mid-March debut, SJNK has hauled in $548.3 million in assets and that number is steadily rising.

In late September, SJNK's AUM total was $289 million. A month ago, it was $433.1 million. SJNK's modified adjusted duration of 2.12 years is just under half that of its longer duration cousin, the SPDR Barclays High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/jnk#NYSE">JNK</a>). If there is a knock on SJNK it is that its longer duration rivals have outpaced it this year.

Market Vectors International High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/ihy#NYSE">IHY</a>)
Keeping with the theme of <a href="http://www.benzinga.com/news/12/12/3160109/etf-inflows-on-record-pace-in-2012-says-morningstar">soaring inflows to bond funds this year</a>, the Market Vectors International High Yield Bond ETF has been an unheralded beneficiary of that movement.

The simple explanation of what IHY does is that it is an international equivalent of JNK or the iShares iBoxx $ High Yield Corporate Bond Fund (NYSE: <a class="ticker" href="/stock/hyg#NYSE">HYG</a>). IHY is 10 basis cheaper than HYG and has the same expense ratio, 0.4 percent as JNK. The Market Vectors offering features a slightly higher 30-day SEC yield than its two larger rivals. Importantly, IHY has not deviated much from the performance of its U.S.-focused rivals. Since, its April debut IHY has slightly outpaced HYG while lagging JNK by a scant amount.

For those that believe a new ETF has to have $100 million in AUM to be validated as a "good" fund, IHY does better than that. The ETF now has over $201 million in assets, implying asset growth of nearly tenfold since late September.

Market Vectors Morningstar Wide Moat Research ETF (NYSE: <a class="ticker" href="/stock/moat#NYSE">MOAT</a>)
Upon debut, critics could have said that MOAT was too esoteric and too much of a niche play. Well, touting Warren Buffett's love of wide moat business has proven to be a smart marketing tool because MOAT has accumulated almost $99 million in AUM. Home to just 21 stocks, MOAT has jumped 6.6 percent since coming to market. An interesting footnote is that Facebook (NASDAQ: <a class="ticker" href="/stock/fb#NASDAQ">FB</a>) is currently MOAT's largest holding with a weight of almost 6.7 percent.

First Trust NASDAQ Technology Dividend Index Fund (NASDAQ: <a class="ticker" href="/stock/tdiv#NASDAQ">TDIV</a>)
The First Trust NASDAQ Technology Dividend Index Fund represents a direct play on an important theme for dividend investors: The tech sector's rise to dividend prominence. While yields are still not impressive across the board, tech is the largest dividend-paying sector in the U.S. in dollar terms. 

Add to that, with the massive cash hoards held by the likes of Microsoft (NASDAQ: <a class="ticker" href="/stock/msft#NASDAQ">MSFT</a>), IBM (NYSE: <a class="ticker" href="/stock/ibm#NYSE">IBM</a>) and other familiar tech names, the sector is expected to provided dividend growth in the coming years. That is assuming the fiscal cliff is avoided and that is the one of the hurdles TDIV faces in the near term. 

A unique aspect to TDIV is that it is not a straight tech play. Rather, the volatility that sector is often known for is tempered somewhat because the ETF is sure to include a 20 percent weight to telecommunications names at each rebalancing. That means Verizon (NYSE: <a class="ticker" href="/stock/vz#NYSE">VZ</a>), AT&amp;T (NYSE: <a class="ticker" href="/stock/t#NYSE">T</a>) and related issues are TDIV holdings. 

TDIV has outperformed the Nasdaq 100 since its August debut, but both have traded lower. Still, TDIV deserves credit for being a play on an important, that being dividend growth potential, and for garnering $46.4 million in AUM to this point.

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

One of the biggest themes in the ETF universe in 2012 has been the impressive accumulation of assets by bond funds. Through the first 10 months of 2012, all bond ETFs, U.S-listed and those trading outside the U.S., raked in $114 billion in new assets. 

U.S. funds did the bulk of the work, attracting $52.8 billion through the end of October, <a href="http://eng.fundsamericas.com/news/etf/9714/Equity-ETF-and-ETP-Investors-Increase-Exposure-to-Emerging-Markets-6-Fold-in-2012?goback=.gde_110203_member_193543466">according to Funds America</a>. That means bond funds are 2012's top asset gatherers among ETFs, putting the asset class well ahead of the almost $36.7 billion hauled in by U.S.-listed emerging markets ETFs.

With fears of the fiscal cliff high and expectations from some market observers that 2013 could be another bumpy year for stocks, it is reasonable to expect bond ETFs as a group will remain proficient at gathering assets. These 10 bond ETFs could help investors weather potential storms while generating income in the year ahead. In no particular order...

PIMCO Total Return ETF (NYSE: <a class="ticker" href="/stock/bond#NYSE">BOND</a>)
Perhaps the worst thing that can be said of the PIMCO Total Return ETF, colloquially known as the "Bill Gross ETF," is that the fund's success is not surprising. Really, did anyone expect an ETF with the bond king's name attached to it to be a flop? 

A flop BOND is not. Since its February 29 inception date, BOND has accumulated <a href="http://www.pimcoetfs.com/Funds/Pages/BOND.aspx">$3.83 billion in assets under management</a>, making it the largest actively managed ETF by a wide margin. More important that superficial statistic is performance. BOND has delivered the goods there as well as the ETF has gained nearly 12 percent since its debut..

iShares Core Total U.S. Bond Market ETF (NYSE: <a class="ticker" href="/stock/agg#NYSE">AGG</a>)
The iShares Core Total U.S. Bond Market ETF, previously the iShares Barclays Aggregate Bond Fund, makes this list for fans of ETF competition. Not only does the fund offer investors a passively managed equivalent to BOND, it is locked in a serious battle with the Vanguard Total Bond Market ETF (NYSE: <a class="ticker" href="/stock/bnd#NYSE">BND</a>).

In fact, it is BND's paltry expense ratio of 0.1 percent that likely prompted AGG's own fee reduction to 0.08 percent. Whether or not Vanguard responds and cuts BND's fees next year remains to be seen. Also interesting will be whether or not investors embrace the low fees of AGG and BND over the allure of BOND's active management. The PIMCO offering charges 0.55 percent per year.

PowerShares Emerging Markets Sovereign Debt Portfolio (NYSE: <a class="ticker" href="/stock/pcy#NYSE">PCY</a>)
If surging bond ETF inflows represent a theme, then a sub-theme is soaring assets under management totals for emerging markets debt funds. That theme <a href="http://www.benzinga.com/markets/bonds/12/12/3156036/seasonal-trends-for-em-bonds">has been obvious throughout 2012</a> and the PowerShares Emerging Markets Sovereign Debt Portfolio has been a prime beneficiary.

Not only is PCY large with over $3 billion in AUM, it is a compelling option for income for investors for several reasons. First, is the 30-day SEC yield almost four percent. Second, is the monthly dividend. Third, most of PCY's holdings are rated investment grade, so investors are not taking on significant credit risk with this fund. 

Market Vectors Emerging Markets Local Currency Bond ETF (NYSE: <a class="ticker" href="/stock/emlc#NYSE">EMLC</a>)
Sticking with the theme of emerging markets bond ETFs, EMLC represents a fine option for the investor looking to gain exposure to non-dollar asset classes. EMLC and rival funds have shown investors <a href="http://www.benzinga.com/markets/bonds/12/12/3154114/local-currency-em-bonds-face-the-fiscal-cliff">improving credit quality and health balance sheets</a> in the emerging world can translate to solid returns.

EMLC, the WisdomTree Emerging Markets Local Debt Fund (NYSE: <a class="ticker" href="/stock/eld#NYSE">ELD</a>) and the iShares Emerging Markets Local Currency Bond Fund (NYSE: <a class="ticker" href="/stock/lemb#NYSE">LEMB</a>) have all traded noticeably higher in 2012. All three have been prodigious gainers of new assets. If 2013 turns out to be a risk on year, those trends should continue for these ETFs.

SPDR Barclays Capital High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/jnk#NYSE">JNK</a>)
Just some folks writing off junk bond ETFs, JNK and rivals such as the iShares iBoxx $ High Yield Corporate Bond Fund (NYSE: <a class="ticker" href="/stock/hyg#NYSE">HYG</a>) look to be closing 2012 on a strong note and are flirting with 52-week highs. HYG and JNK are favorite tools for gauging risk appetite because some pros view these ETFs as trading in comparable fashion to stocks.

Savvy traders keep an eye on JNK because its tracking error relative to its index is looser (worse) than HYG's. That means in lieu of a heavily traded inverse junk bond ETF (there is one, though it is thinly traded), traders that want to short junk bonds often short JNK.

Market Vectors International High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/ihy#NYSE">IHY</a>)
If there is superficial problem with HYG and JNK it is that those are the only high-yield bond ETFs the mainstream financial press pays attention to. The derivative problem is that by using HYG and JNK as the indicators for the broader junk bond ETF world, <a href="http://www.benzinga.com/markets/bonds/12/12/3144876/following-redemptions-junk-bond-etfs-at-multi-week-highs">compelling funds go ignored</a>.

The Market Vectors International High Yield Bond ETF is one such fund. When folks were crowing about outflows from HYG and JNK, they were also ignoring one of 2012's better asset-gathering stories. IHY debuted in April and now has almost $202 million in AUM. IHY has also gained more than eight percent since its debut. Anything close to those AUM and performance numbers in 2013 would make for a very successful sophomore year.

Vanguard Short-Term Inflation-Protected Securities Index ETF (NYSE: <a class="ticker" href="/stock/vtip#NYSE">VTIP</a>)
Speaking of ETFs to watch in their sophomore seasons, VTIP merits consideration. The fund debuted in October as Vanguard's first foray into the short-term TIPS market. Since there are scores of TIPS ETFs out there, VTIP encroached on someone else's territory. The iShares Barclays 0-5 Year TIPS Bond Fund (NYSE: <a class="ticker" href="/stock/stip#NYSE">STIP</a>) is one example. Again, this tussle could come down to fees. VTIP charges 0.1% per year, just half of what STIP charges. 

Market Vectors High-Yield Muni ETF (NYSE: <a class="ticker" href="/stock/hyd#NYSE">HYD</a>)
Municipal bonds defied conventional wisdom in 2012. Early in the year, there was plenty of chatter regarding an increased number of municipal defaults. That chatter proved accurate and there is no getting around the fact that plenty of states, including large ones such as California and Illinois, are not in the best fiscal health.

Investors shrugged off those concerns to send <a href="http://www.benzinga.com/markets/bonds/12/11/3135673/muni-bond-etfs-jump-to-new-highs-on-cliff-fears">muni bond ETFs soaring</a>. Moreover, investors have shown little reluctance about embracing high-yield muni fare. HYD has performed like a high-beta stock, jumping nearly 18 percent to this point in 2012 while crossing the $1 billion in AUM level. 

HYD and its brethren face some important issues in 2013. First, will the tax treatment of muni bonds change for the worse as politicians seek to generate much-needed revenue? Second, for how long will investors keep ignoring municipal defaults as they hunt for yield?

WisdomTree Emerging Markets Corporate Bond Fund (NASDAQ: <a class="ticker" href="/stock/emcb#NASDAQ">EMCB</a>)
In a year when BOND, and rightfully so, has commanded most of the positive headlines relating to new bond ETFs, it has been hard for other funds to standout. However, the WisdomTree Emerging Markets Corporate Bond Fund has been a standout in its own. Bringing in almost $96 million in just 10 months of trading says as much.

Until recently, emerging markets corporate debt has not been the first destination investors think about when evaluating ex-U.S. bond options. There are signs that is starting to change amid increased issuance of these bonds and high premiums investors are forced to pay on emerging markets sovereign issues. 

For those that think EMCB's concept is too narrow or opaque, think again. The ETF has, in a way, been validated by the appearance of <a href="http://www.benzinga.com/stock-articles/emcb/all">not one, but two competitors</a>.

PowerShares Senior Loan Portfolio (NYSE: <a class="ticker" href="/stock/bkln#NYSE">BKLN</a>)
The PowerShares Senior Loan Portfolio, the first ETF to bring senior loans to the masses, has enjoyed an excellent 2012. BKLN is up 9.2 percent and while that lags the performance of HYG and JNK, it is worth noting BKLN's volatility is substantially lower than those rival high-yield funds.

BKLN's success has been a direct result of investors searching for yield and that success if proven by the fund's rapid accumulation of assets. In July, BKLN had $583 million in AUM, but that <a href="http://www.benzinga.com/markets/bonds/12/10/2976126/bank-loan-etf-going-strong">number jumped to $880 million by late September</a> and then over $1 billion by early October. As of December 7, BKLN was home to more than $1.4 billion in AUM.

As a high-yield fund, BKLN is a worthwhile risk appetite gauge and that validates it as a bond ETF to watch in 2013. What will also be interesting is that 2013 will be BKLN's first full trading year with a year competitor. The Pyxis/iBoxx Senior Loan ETF (NYSE: <a class="ticker" href="/stock/snln#NYSE">SNLN</a>) debuted in early November.

For more on bond ETFs, click <a href="http://www.benzinga.com/markets/bonds">here</a>.

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BKLN

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Market Vectors Emerging Markets Local Currency Bond ETF

EMLC

Market Vectors High Yield Municipal Index ETF

LEMB

PowerShares Emerging Markets Sovereign  Portfolio

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STIP

VTIP

10 For '13: Bond ETFs For The New Year 

Calls that high-yield bond ETFs are damaged goods appear to have been premature. It was less than three weeks ago that <a href="http://www.benzinga.com/markets/bonds/12/11/3090840/not-all-junk-bond-etfs-suffering-outflows">some mainstream financial media outlets</a> were quick to highlight outflows from the largest U.S. junk bond ETFs, including the iShares iBoxx $ High Yield Corporate Bond Fund (NYSE: <a class="ticker" href="/stock/hyg#NYSE">HYG</a>).

Recent price action in HYG and rival funds such as the SPDR Barclays Capital High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/jnk#NYSE">JNK</a>) suggests recent outflows have had minimal impact on the performance of these funds. HYG and JNK, the two largest junk bond ETFs by assets, closed flat on Tuesday, but the flat close is enough to have both funds trading at multi-week highs.

HYG closed today at its highest levels since mid-October <a href="http://www.finviz.com/quote.ashx?t=hyg&amp;ty=c&amp;ta=1&amp;p=d">and looks poised to breakthrough some stiff resistance at $93</a>. JNK is bumping against strong resistance at $40.50, but even after falling one cent on Tuesday, the ETF is still at its highest price area since October.

The PowerShares Fundamental High Corporate Bond ETF (NYSE: <a class="ticker" href="/stock/phb#NYSE">PHB</a>) also closed flat on the day, but that is enough to have ETF at its highest price in nearly two months. PHB closed less than 0.2 percent below its 52-week high.

In another sign that investors are still embracing high-yield bond ETFs, some of these ETFs are seeing surging inflows. As <a href="http://www.benzinga.com/markets/bonds/12/11/3090840/not-all-junk-bond-etfs-suffering-outflows">Benzinga noted on November 14</a>, the SPDR Barclays Short Term High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/sjnk#NYSE">SJNK</a>) had $433.1 million in assets under management on November 13. That number has since soared to $518.7 million, <a href="https://www.spdrs.com/product/fund.seam?ticker=SJNK">according to State Street data</a>.

Additionally, the The PowerShares Senior Loan Portfolio (NYSE: <a class="ticker" href="/stock/bkln#NYSE">BKLN</a>) continues to add to its AUM total. In mid-November, the ETF's assets tally was $1.32 billion. At the start of trading on December 4, that number had grown to $1.37 billion. BKLN closed Tuesday less than 50 cents below its all-time high. 

Then there is the case of the Market Vectors International High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/ihy#NYSE">IHY</a>). IHY, which debuted in April, also closed Tuesday at its highest levels since October. The ETF, one of the first to give investors access to global high-yield corporates, is arguably the poster child for the inability of some market observers and participants to comprehend the fact there are other junk bond ETFs on the out there besides HYG and JNK.

IHY has returned 4.3 percent since its debut and $195.4 million in AUM as of December 3, <a href="http://vaneck.com/funds/IHY.aspx">according to Market Vectors data</a>. That is up from $180.7 million just two weeks ago and a nearly ten-fold increase in assets since late September.

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

PowerShares Fundamental High Yieldorate Bond Portfolio

Following Redemptions, Junk Bond ETFs at Multi-Week Highs

Here is the ETF Professor's ETF Watch List for Tuesday December 4, 2012.

Keep an eye on the SPDR Gold Shares (NYSE: <a class="ticker" href="/stock/gld#NYSE">GLD</a>).

Let's see if the Energy Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xle#NYSE">XLE</a>) can rebound this month.

The Guggenheim Solar ETF (NYSE: <a class="ticker" href="/stock/tan#NYSE">TAN</a>) could be in more trouble.

Same goes for the Market Vectors Junior Gold Miners ETF (NYSE: <a class="ticker" href="/stock/gdxj#NYSE">GDXJ</a>).

Emerging markets plays of the day: ProShares UltraShort Brazil (NYSE: <a class="ticker" href="/stock/bzq#NYSE">BZQ</a>), iShares S&amp;P Latin America 40 Index Fund (NYSE: <a class="ticker" href="/stock/ilf#NYSE">ILF</a>) and the iShares MSCI South Korea Index Fund (NYSE: <a class="ticker" href="/stock/ewy#NYSE">EWY</a>).

Forex play of the day: PowerShares DB Dollar Bullish (NYSE: <a class="ticker" href="/stock/uup#NYSE">UUP</a>).

Bond play of the day: Market Vectors International High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/ihy#NYSE">IHY</a>).

Pre-Market Outlook

GDXJ

iShares Trust S&P Latin America 40 Index Fund

PowerShares DB US Dollar Index Bullish Fund

ETFs to Watch December 4, 2012 (EWY, GDXJ, UUP)

Van Eck Global, the parent company of Market Vectors, has filed plans with the Securities and Exchange Commission to possibly introduce the Market Vectors High Yield/Treasury Bond ETF. That ETF would use U.S. Treasuries as a hedge against the interest rate sensitivity inherent in high-yield bonds. News of the new ETF was reported by <a href="http://www.indexuniverse.com/sections/news/15191-market-vectors-inks-hedged-junk-bond-etf.html">Index Universe</a> earlier Monday.

The ETF will track the Market Vectors High-Yield/Treasury Bond Index. The Index includes bonds issued by both U.S. and non-U.S. issuers. The country of risk of qualifying issuers must be a member of the Group of Ten, a Western European nation or a territory of the United States, <a href="http://www.sec.gov/Archives/edgar/data/1137360/000093041312006194/c71647_485apos.htm">according to the filing</a>.

Typically, junk bonds have lower durations than Treasuries or high-grade corporates because they have shorter maturities. Many high-yield bonds are issued with maturities of a decade or less and many are called in just half that time. That is to say high-yield bonds are more sensitive to credit risk than interest rate risk.

As the Van Eck filing notes, "Bonds are also subject to interest rate risk. Interest rate risk refers to fluctuations in the value of a bond resulting from changes in the general level of interest rates. When the general level of interest rates goes up, the prices of most bonds go down. When the general level of interest rates goes down, the prices of most bonds go up."

The filing did not include a ticker or expense ratio for the Market Vectors High-Yield/Treasury Bond ETF.

Market Vectors already counts three high-yield bond funds among its 50-ETF lineup. The firm introduced the Market Vectors Fallen Angel High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/angl#NYSE">ANGL</a>), the Market Vectors Emerging Markets High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/hyem#NYSE">HYEM</a>) and the Market Vectors International High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/ihy#NYSE">IHY</a>) this year. Combined, those new ETFs have over $210 million in assets under management.

For more on junk bond ETFs, click <a href="http://www.benzinga.com/markets/bonds/12/11/3103574/global-funds-impress-as-u-s-junk-bond-etfs-see-redemptions">here</a>.

ANGL

Van Eck Files Plans For Hedged Junk Bond ETF

Shares of the SPDR Barclays Capital High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/jnk#NYSE">JNK</a>), the second-largest high-yield bond ETF by assets, are higher by half a percent today despite rising short interest in the fund. The volume of borrowed shares in JNK jumped to 22.8 million on Friday, about three times the average during the past year and up from 9.75 million shares a month ago, <a href="http://www.bloomberg.com/news/2012-11-19/state-street-s-junk-bond-etf-draws-record-volume-of-bearish-bets.html">Bloomberg reported, citing Markit Group data</a>.

Consider that factoid about JNK, which has $11.6 billion in assets under management, the latest ding on U.S.-focused junk bond ETFs. Until recently, the asset class has thrived as investors have sought new avenues for yield in today's low interest rate environment. 

Last week, it was reported that JNK's primary rival, the larger iShares iBoxx $ High Yield Corporate Bond Fund (NYSE: <a class="ticker" href="/stock/hyg#NYSE">HYG</a>), saw outflows of almost $219 million on Tuesday. The five largest junk bond ETFs have seen outflows totaling $1.97 billion since September, <a href="http://www.benzinga.com/markets/bonds/12/11/3090840/not-all-junk-bond-etfs-suffering-outflows">Bloomberg reported</a>. 

Skewering HYG, JNK and rival U.S.-focused high-yield bond ETFs for asset losses obfuscates a critical fact. That being international junk bond ETFs have been quite proficient in gathering assets this year. That fact is made all the more impressive when considering that all of the major ETFs exclusively devoted to global high-yield debt did not even exist until this year.

Take the example of the Market Vectors Emerging Markets High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/hyem#NYSE">HYEM</a>). HYEM, which debuted in early May, focuses on a burgeoning segment of the bond market. Dollar-denominated emerging markets bonds represented $84 billion of the EM bond universe in 2003, but that number jumped to $541 billion last year according to data from Bank of America Merrill Lynch and J.P. Morgan. 

To this point, HYEM has gathered $20.7 million in assets under management. Not jaw-dropping, but a decent start for a new ETF with a niche focus. A 30-day SEC yield of 6.72 percent and the growth of the high-yield market in developing nations could be catalysts for future inflows to HYEM.

While $20.7 million may not sound impressive, the $180.3 million raked in by the Market Vectors International High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/ihy#NYSE">IHY</a>) is. That fund debuted in early April and is a developed market equivalent to HYEM. France, the U.K., Germany and Canada combine for about 35 percent of IHY's weight. 

No matter how one slices things, $180.3 million in inflows is stellar for an ETF that is not even 10 months old. However, the success of IHY is rarely, if ever mentioned, in the mainstream financial press. 

BlackRock's (NYSE: <a class="ticker" href="/stock/blk#NYSE">BLK</a>) iShares unit, the world's largest ETF sponsor, has found its own success with global high-yield bond funds this year. The iShares Global High Yield Corporate Bond Fund (BATS: GHYG), which debuted in early April, has nearly $35.5 million in AUM. That is with U.S. issues accounting for nearly two-thirds of the fund's weight and with the ETF trading on the BATS Exchange, which is not nearly as well known as the New York Stock Exchange or Nasdaq.

The iShares Global ex USD High Yield Corporate Bond Fund (BATS: HYXU) is the iShares rival to IHY. To be sure, HYXU has not proven as popular to this point with $25.4 million in AUM. That might have something to do with the euro being the dominant currency in this ETF. Euro-denominated issues account for over 86 percent of HYXU's weight.

So GHYG and HYXU have almost $61 million in AUM combined and that may not be enough to catch critics' eyes. Perhaps the $176 million held by the iShares Emerging Markets High Yield Bond Fund (BATS: EMHY) is enough. 

EMHY debuted in April and its success indicates investors are willing to take on some of level of risk with their international bond holdings. Sure, Turkey and the Philippines combine for over 26 percent of the fund's weight, but Venezuela is the second-largest country weight with an allocation north of 14 percent. This is an ETF where Ukraine, Hungary and Lebanon are more prominently displayed than Brazil, China and Russia.

Add up the flows to IHY and EMHY, the latter of which also trades on BATS, and the number is over $356 million. Over $180 million and $176 million, respectively, for two ETFs that debuted in April is an accomplishment in any environment, let alone that has been more risk off than risk on. Using these two funds as the measuring sticks, perhaps it is fair to argue that some of the money departing HYG and JNK is flowing to global junk bond ETFs. 

Even if that is not the case, it is clear investors have some appetite for international high-yield bonds. It would seem only fair to mention that when highlighting outflows from HYG, JNK and other U.S.-focused junk bond ETFs, right?

For more on junk bond ETFs, click <a href="http://www.benzinga.com/markets/bonds/12/11/3090840/not-all-junk-bond-etfs-suffering-outflows">here</a>.

Global Funds Impress as U.S. Junk Bond ETFs See Redemptions

The iShares iBoxx $ High Yield Corporate Bond Fund (NYSE: <a class="ticker" href="/stock/hyg#NYSE">HYG</a>), the largest ETF that tracks junk bonds, saw outflows of almost $219 million on Tuesday. Perhaps that is a sign that investors are taking profits in high-yield bonds and the corresponding ETFs, <a href="http://www.benzinga.com/analyst-ratings/analyst-color/12/09/2950302/are-junk-bond-etfs-topping-out">a scenario Benzinga reported was at play almost two months</a>.

The five-largest junk bond ETFs have lost $1.97 billion in assets since September, <a href="http://www.businessweek.com/news/2012-11-14/blackrock-s-junk-bond-etf-has-record-withdrawals-as-rally-fades">according to Bloomberg</a>. However, the focus on HYG and its rival, the SPDR Barclays High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/jnk#NYSE">JNK</a>) underscores a familiar theme in the ETF universe. 

That being the implication that only the largest funds tracking a particular asset class matter. With HYG and JNK, this is understandable given that the two ETFs combined for over $28.3 billion in assets under management at the start of trading Wednesday. Understandable, but not excusable. Not excusable because by focusing on HYG and JNK, missed is the fact that inflows to other junk bond ETFs have been impressive. This scenario was reported on <a href="http://www.benzinga.com/markets/bonds/12/09/2936166/junk-bond-etfs-other-than-the-big-2-seeing-inflows">in late September</a>.

Nitpicking about $219 million departing from HYG, which had over $16.5 billion in AUM at the start of Wednesday's session, means glossing over a stellar run of asset gathering for the SPDR Barclays Short Term High Yield Bond ET (NYSE: <a class="ticker" href="/stock/sjnk#NYSE">SJNK</a>). SJNK, JNK's short duration cousin, had $289 million in AUM on September 21. As of November 13, that number was $433.1 million, <a href="https://www.spdrs.com/product/fund.seam?ticker=SJNK">according to State Street data</a>.

More impressive have been the AUM gains spotted at the Market Vectors International High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/ihy#NYSE">IHY</a>). IHY, which debuted in early April, has easily crossed the much ballyhooed $100 million in AUM mark. In fact, IHY had $180.7 million in assets as of Tuesday. That means that since late September, IHY has grown its AUM total by nearly nine-fold.

When it comes to high-yield bond ETFs with prodigious asset-gathering talents, the PowerShares Senior Loan Portfolio (NYSE: <a class="ticker" href="/stock/bkln#NYSE">BKLN</a>) cannot be overlooked. BKLN's AUM chart, in words, would be explained like this: Less than $600 million in AUM in July to $927 million at the end of September. That $927 million turned to nearly $1.2 billion <a href="http://www.benzinga.com/markets/bonds/12/10/3043987/flows-for-this-etf-issuer-show-investors-love-dividends">at the end of October</a>. Today, the fund has $1.32 billion in AUM.

Clearly, the data support the fact assets have departed HYG. However, that does not mean assets are leaving all junk bond ETFs. The data say that just is not the case.

For more on junk bond ETFs, <a href="http://www.benzinga.com/analyst-ratings/analyst-color/12/09/2950302/are-junk-bond-etfs-topping-out">here</a>.

Not All Junk Bond ETFs Suffering Outflows

Here is the ETF Professor's ETF Watch List for Wednesday November 14, 2012.

The U.S. Natural Gas Fund (NYSE: <a class="ticker" href="/stock/ung#NYSE">UNG</a>) perked up on Tuesday.

The Market Vectors Junior Gold Miners ETF (NYSE: <a class="ticker" href="/stock/gdxj#NYSE">GDXJ</a>) had a tough day.

The iShares Dow Jones US Consumer Services Index Fund (NYSE: <a class="ticker" href="/stock/iyc#NYSE">IYC</a>) will be on to watch in the coming weeks.

Leveraged play of the day: ProShares UltraShort Oil &amp; Gas (NYSE: <a class="ticker" href="/stock/dug#NYSE">DUG</a>).

Emerging markets plays of the day: iShares MSCI Taiwan Index Fund (NYSE: <a class="ticker" href="/stock/ewt#NYSE">EWT</a>), iShares MSCI South Korea Index Fund (NYSE: <a class="ticker" href="/stock/ewy#NYSE">EWY</a>) and the Market Vectors Russia ETF (NYSE: <a class="ticker" href="/stock/rsx#NYSE">RSX</a>).

Forex play of the day: CurrencyShares British Pound Sterling Trust (NYSE: <a class="ticker" href="/stock/fxb#NYSE">FXB</a>).

Bond play of the day: Market Vectors International High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/ihy#NYSE">IHY</a>).

CurrencyShares British Pound Sterling Trust

iShares Trust Dow Jones USnsumer Services Sector Index Fund

Market Vectors Russia ETF Trust Shares of Beneficial Interest

ETFs to Watch November 14, 2012 (EWT, GDXJ, IHY)

Van Eck, the parent company of the Market Vectors ETF business, has filed plans with the Securities and Exchange Commission to possibly introduce the Market Vectors-Altman Defaulted &amp; Distressed Bond ETF. The passively managed fund will track the Market Vectors-Altman Defaulted &amp; Distressed Bond Index and trade on the New York Stock Exchange.

A ticker and expense ratio were not included <a href="http://www.sec.gov/Archives/edgar/data/1137360/000093041312005935/c71493_485apos.htm#c71493a008_v1">in the filing.</a>

The index includes both U.S. and foreign bonds and to be included in the index, bonds must have below investment-grade ratings. Van Eck warned of the risks associated with these bonds in the filing. The index is comprised of bonds with no less than a 10 percent spread to comparable U.S. Treasuries. Issuers are capped at five percent in the index.

"Defaulted and distressed bonds are subject to greater risk of loss of income and principal than higher rated securities and are considered speculative. The prices of defaulted and distressed bonds are likely to be more sensitive to adverse economic changes or individual issuer developments than higher rated securities. During an economic downturn or substantial period of rising interest rates, distressed security issuers may experience financial stress that would adversely affect their ability to service their principal and interest payment obligations, to meet their projected business goals or to obtain additional financing. In the event of a default, the Fund may incur additional expenses to seek recovery," according to the filing.

The firm also noted the fund "expects to effect a portion of its creations and redemptions for cash," meaning the ETF could be less tax efficient than traditional ETFs.

Market Vectors has introduced several new ETFs this year with exposure to high-yield bonds including the Market Vectors Fallen Angel High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/angl#NYSE">ANGL</a>), the Market Vectors High Yield Bond Emerging Markets ETF (NYSE: <a class="ticker" href="/stock/hyem#NYSE">HYEM</a>) and the Market Vectors International High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/ihy#NYSE">IHY</a>).

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

Van Eck Files For Distressed Bond ETF

This much is clear: Investors love bond ETFs. Of the 15 largest U.S.-listed ETFs by assets under management at the end of June, five were bond funds. Two of this year's most successful new ETFs are bond funds, those being the PIMCO Total Return ETF (NYSE: <a class="ticker" href="/stock/bond#NYSE">BOND</a>) and the WisdomTree Emerging Markets Corporate Bond ETF (NASDAQ: <a class="ticker" href="/stock/emcb#NASDAQ">EMCB</a>).

Beyond BOND and EMCB, there are some new, <a href="http://www.benzinga.com/markets/bonds/12/08/2845080/some-new-obscure-bond-etfs-merit-consideration">obscure bond ETFs that do merit consideration by investors</a>. One such example is the Market Vectors International High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/ihy#NYSE">IHY</a>).

The Market Vectors International High Yield Bond ETF debuted in April as the first of three high-yield bond funds introduced by Market Vectors this year. In six months of trading, IHY has raked in $20 million in assets under management, a decent start but perhaps not enough to make large crowds take notice. Average daily volume of almost 10,000 shares is also decent by the standards of a new ETF, but not jaw-dropping.

Like any ETF, IHY has its pluses and minuses. One black mark against IHY is potential currency risk because the fund's holdings are not entirely denominated in U.S. dollars. In addition to greenbacks, IHY's holdings are denominated in euros, Canadian dollars and British pounds.

On the other hand, investors that crave the robust yields offered by junk bonds might be missing out on international opportunities by opting to solely focus on ETFs such as the iShares iBoxx $ High Yield Corporate Bond ETF (NYSE: <a class="ticker" href="/stock/hyg#NYSE">HYG</a>) and the SPDR Barclays Capital High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/jnk#NYSE">JNK</a>).

IHY's 30-day SEC yield is 6.59 percent. That tops JNK's 30-day SEC yield by almost 50 basis points and HYG's by almost almost 75 basis points. Grabbing that extra yield does come with a slight increase in duration as the ETF's average modified duration is 4.65 years. JNK's modified adjusted duration is just under 4.3 years while HYG's effective duration is less than four years. Additionally, IHY's holdings featuring an average years to maturity of 8.1 years, well above the average maturities in HYG and JNK.

Clearly, there are pros and cons to IHY, but something else is clear about this ETF and that is the international high-yield bond market is a niche that is experiencing exponential growth. The international segment of the global high-yield corporate bond market has grown from approximately 10 percent in 1997 to 35 percent in 2011, according to Market Vectors. Should the prediction that bond ETFs will hold <a href="http://blogs.barrons.com/incomeinvesting/2012/08/28/blackrock-bond-etfs-reach-2-trillion-by-2022/">$2 trillion in AUM by 2022</a> prove accurate, it might be reasonable to expect narrowly focused products such IHY will capture enough investor capital to survive and thrive.

There is reason to believe that can happen, particularly is risk appetite increases because international high-yield debt sports a low correlation to U.S. Treasuries or investment-grade corporates.

"Global high-yield corporate bonds have had low or negative correlation to other bond asset classes. In fact, they have historically been more correlated to equities which may provide an opportunity to diversify bond portfolios," Market Vectors said in a research piece.

IHY also offers potential for investors that merely care about performance. In the past 90 days, the new ETF has trounced the returns offered by BOND, JNK and HYG.

For more on bond ETFs, click <a href="http://www.benzinga.com/markets/bonds/12/08/2862451/play-latam-bonds-with-these-etfs">here</a>.

Under The Hood: Foreign Junk

Here is the ETF Professor's ETF Watch List for Tuesday August 14, 2012.

The Energy Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xle#NYSE">XLE</a>) continues to look strong.

The jury is still out on the SPDR S&amp;P Metals &amp; Mining ETF (NYSE: <a class="ticker" href="/stock/xme#NYSE">XME</a>).

Keep an eye on the Global X Uranium ETF (NYSE: <a class="ticker" href="/stock/ura#NYSE">URA</a>).

Emerging markets plays of the day: iShares MSCI Brazil Index Fund (NYSE: <a class="ticker" href="/stock/ewz#NYSE">EWZ</a>), Market Vectors Indonesia Small-Cap ETF (NYSE: <a class="ticker" href="/stock/idxj#NYSE">IDXJ</a>) and the iShares MSCI Mexico Investable Market Index Fund (NYSE: <a class="ticker" href="/stock/eww#NYSE">EWW</a>).

Forex play of the day: CurrencyShares Canadian Dollar Trust (NYSE: <a class="ticker" href="/stock/fxc#NYSE">FXC</a>).

Bond play of the day: Market Vectors Intl High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/ihy#NYSE">IHY</a>).

IDXJ

ETFs to Watch August 14, 2012 (EWZ, FXC, XME)

Looks can be deceiving. So can the performances of stocks and ETFs. Relying on the wrong performance time frame can lead investors to purchase the wrong ETF at the wrong time. Moreover, relying on the wrong time period can keep investors out of the right ETF at the right time.

Imagine this scenario: At first blush, a given ETF looks great. It is is up 30 percent year-to-date in June. So, an investor buys that fund July, but it then declines markedly.

That scenario underscores the limitations of using year-to-date performance as a deciding factor in purchasing (or avoiding) select ETFs. All that glitters is not always gold. In other words, investors need not be seduced or dissuaded by year-to-date performances. Below are four examples that illustrate this point. 

Market Vectors India Small-Cap ETF (NYSE: <a class="ticker" href="/stock/scif#NYSE">SCIF</a>)
Nearly any India ETF could be inserted here. Nonetheless, the Market Vectors India Small-Cap ETF could easily lure unknowing investors into its web of deceit with its approximately 21.3 percent year-to-date gain. That might sound good, but SCIF's year-to-date gain needs to be put into context. Since running from around $9 in early January to just over $14 in late February, SCIF has drifted lower and lower.

SCIF, like other India ETFs, has been afflicted with a gloomy scenario. Global investors have likely become alarmed with <a href="http://www.benzinga.com/analyst-ratings/analyst-color/12/06/2658878/india-one-foot-out-the-door-of-the-brics-house-epi-pin-s">the state of the Indian economy</a>. This investor alarm could be warranted, based on India's rising deficits, slowing growth and a tenuous hold on an investment-grade rating.

As a result, SCIF has lost almost 14 percent in the past 90 days. Within this period though, the ETF gained around 13.1 percent in the past month. The cold reality with India ETFs is that they giveth, taketh away and repeat. 

iShares MSCI Belgium Investable Market Index Fund (NYSE: <a class="ticker" href="/stock/ewk#NYSE">EWK</a>)
The year-to-date performance of the iShares MSCI Belgium Investable Market Index Fund is arguably quite surprising, as well as deceiving. Belgium is a Eurozone nation and the ability of its economy and equity market to remain resilient, in the face of the region's sovereign debt woes, has been impressive. Relatedly, EWK is up six percent year-to-date.

Without considering the primary driver of this ETF's year-to-date gains, investors could be misguided. Anheuser-Busch InBev (NYSE: <a class="ticker" href="/stock/bud#NYSE">BUD</a>) accounts for almost 27 percent of EWK'w weight and is up 27 percent this year. In the past month, the stock is up almost 14 percent, while EWK is not even up one percent. This disparity might indicate that investors who want exposure to Belgium may do well to own Anheuser-Busch InBev instead of EWK.

Market Vectors International High-Yield Bond ETF (NYSE: <a class="ticker" href="/stock/ihy#NYSE">IHY</a>) The Market Vectors International High-Yield Bond ETF debuted in early April. In the fund's two months of trading, it has lost almost five percent. 

IHY's potential problem may not be its junk bond holdings (over 76 percent of the index the ETF tracks is rated non-investment grade by Standard &amp; Poor's). Instead, the fund's biggest near-term hurdle could be its global nature and euro denominated issues, which comprise about a third of its total issues. 

Some investors have started to look past those concerns because IHY now has $19.4 million in AUM and has surged 5.4 percent in the past month. Most of the fund's bond issues are dollar-denominated. In addition, Market Vectors expects IHY will pay a monthly dividend. These dividend expectations could indicate that this ETF has some use for income investors that are willing to take on some added risk.

iShares MSCI Taiwan Index Fund (NYSE: <a class="ticker" href="/stock/ewt#NYSE">EWT</a>)
EWT is sporting a year-to-date gain. However, as is the case with other India ETFs, this fund would be negative year-to-date if not for a stellar January-February run. In the past 90 days, EWT has given up around 6.4 percent and the ETF's <a href="http://www.benzinga.com/trading-ideas/short-ideas/12/06/2704999/the-death-cross-is-calling-for-these-etfs">technical outlook is far from rosy</a>. If EWT trades below $11.60, its technical picture could signal that more downside would be approaching.

For more technical analysis on ETFs, click <a href="http://www.benzinga.com/trading-ideas/short-ideas/12/06/2704999/the-death-cross-is-calling-for-these-etfs">here</a>.

Technicals

iShares MSCI Belgium Ivestable Market Index Fund

SCIF

Four Deceiving ETF Performances (EWT, IHY, SCIF)

For an asset class that isn't even 20 years old, exchange-traded products have certainly been on the receiving end of plenty of controversy. Blamed for everything from rising correlations to higher commodities prices to the May 2010 flash crash, ETFs have not been strangers to negative headlines.

In other words, finding new areas of concern, consternation, controversy and misunderstanding within the ETF universe should at this point be hard to do, but where there's a will to whip, a whipping boy will usually be found. 

Following an usual $725 million redemption earlier this month in the $10.5 billion SPDR Barclays Capital High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/jnk#NYSE">JNK</a>), junk bond funds are now arguably the new ETF whipping boy. The <a href="http://blogs.wsj.com/marketbeat/2012/05/25/appetite-for-junk-bonds-shrinking-fast/">Wall Street Journal claims investor interest in high-yield bonds is waning</a>. Moody's Investors Service said earlier this week that the JNK trade resulted in the fund trading at a discount to its net asset value after trading at a premium to NAV for several months and that increased institutional trading of ETFs can put individual investors at risk.

Addressing the Moody's point, this is a ratings agency that still has an investment grade rating on Spain, so its credibility on shining the spotlight on what is and isn't bad for investors is dubious at best. The Journal article even acknowledges that since August 2011 there have been only three weeks that saw net flows out of junk bond funds, a period that saw almost $26 billion flow into such funds, but that's buried below the point about $2.46 billion being taken out of those funds in the most recent week.

What no one seems to care to acknowledge is that not only are <a href="http://www.benzinga.com/markets/bonds/12/04/2496443/etf-showdown-jumping-for-junk-hyg-ihy-hyxu">junk bond ETFs increasing in number, but these new funds are doing pretty well right off the bat</a>. As one example, Van Eck Global, the fifth-largest U.S. ETF issuer and parent company of Market Vectors, has introduced three new high-yield bond funds that have raked in a combined $39 million in AUM. That may not sound like much for three ETFs, but consider this: None of those ETFs is even two months old.

We'll let the market decide if junk bond ETFs are good or bad. For now, use this guide to navigate the expanding world of high-yield bond offerings.

iShares iBoxx $ High Yield Corporate Bond Fund (NYSE: <a class="ticker" href="/stock/hyg#NYSE">HYG</a>)
With over $14.3 billion in AUM, HYG is the big kahuna of junk bond ETFs. With an expense ratio of 0.5%, HYG holds 601 primarily U.S. issues. Consumer staples, financials, energy and telecommunications get double-digit sector allocations with industrials not far behind at 9.9%. Year-to-date, HYG is off 1.9%, but the fund has a 12-month trailing yield of 7.36% and pays a monthly dividend, two factors that explain why the fund has been so popular with investors.

SPDR Barclays Capital High Yield Bond (NYSE: <a class="ticker" href="/stock/jnk#NYSE">JNK</a>)
In terms of AUM, JNK plays second fiddle HYG, but the SPDR fund is cheaper (0.4% in annual fees) and is more heavily traded. JNK is home to "just" 227 holdings, but its yield of 7.51% tops HYG. The SPDR fund has also slightly outperformed its iShares rival this year. For whatever reason, JNK appears to be more controversial than HYG and if the former violates support at $38, near-term downside could be significant.

SPDR Barclays Capital Short Term High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/sjnk#NYSE">SJNK</a>)
With an average maturity of 3.33 years, SJNK is the short-term cousin to JNK. Before folks rush to say investors are fed up with high-yield bonds and the corresponding ETFs, they might want to do some fact-checking with SJNK. This ETF came to market in mid-March and already has more than $129 million in assets under management. SJNK also charges 0.4% and is home 261 issues, but the yield is just 0.68%.

PowerShares Fundamental High Yield Corporate Bond Portfolio (NYSE: <a class="ticker" href="/stock/phb#NYSE">PHB</a>)
PHB is the PowerShares alternative to HYG and JNK and it might be the best alternative because it has outperformed its larger rivals on a year-to-date basis. PHB is small compared to HYG and JNK, but not small overall. The fund, which charges 0.5%, has $927 million in AUM.

Consumer discretionary, energy, financials and industrials dominate the sector mix. This fund holds almost 220 issues, yields nearly 5.4% and also pays a monthly dividend.

Market Vectors High-Yield Muni ETF (NYSE: <a class="ticker" href="/stock/hyd#NYSE">HYD</a>)
The Market Vectors High-Yield Muni ETF is often left out of the traditional junk bond conversation and that's quite alright. While there has been plenty of talk about the demise of muni bonds, a situation that has yet to materialize <a href="http://www.benzinga.com/markets/bonds/12/05/2595919/muni-bond-etfs-and-retirees-a-match-made-in-heaven">a fund like HYD is one of the few high-yield bond options a conservative investors might feel comfortable with</a>.

With an expense ratio of 0.35%, HYD is cheaper than the other funds mentioned to this point and the $620 million ETF garners overall and three-year four-star ratings from Morningstar. HYD yield 5.3% and pays a monthly dividend. As an aside, when other junk bond ETFs were hit on strong volume on Thursday, HYD touched a new 52-week high on above average trade.

Market Vectors Fallen Angel High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/angl#NYSE">ANGL</a>)
ANGL debuted in mid-April and already has $10 million in AUM. So-called fallen angel companies are typically large, familiar companies that have lost investment-grade status where as many companies issuing high-yield bonds are smaller, more obscure and have never had investment-grade status. What investors need to know is that MOST, but not ALL of ANGL's holdings are non-investment grade. The fund charges 0.4% and is expected to pay a monthly dividend.

Market Vectors International High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/ihy#NYSE">IHY</a>)
The oldest of the three new Market Vectors junk bond ETFs, IHY is off to a fine start with almost $19 million in AUM in less than two months of trading. Most of IHY's issues mature in the one to 10-year time frame. IHY features issues denominated in euros, U.S. dollars, Canadian dollars or pound sterling issued in the major domestic or Eurobond markets. 

Regarding IHY's currency exposure, it should be noted that less than a third of the fund's 90 holdings are denominated in euros and most are U.S. dollar-denominated.

Note IHY has a competitor in the form of the iShares Global High Yield Corporate Bond Fund (BATS: GHYG).

Market Vectors Emerging Markets High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/hyem#NYSE">HYEM</a>)
HYEM debuted earlier this month and already has almost $10 million in AUM. Clearly, the combination of emerging markets and high-yield bonds under one roof isn't for everyone, but EM debt is gaining a bigger footprint <a href="http://www.benzinga.com/markets/bonds/12/05/2573177/a-look-at-the-new-em-junk-bond-etf-hyem">in the high-yield universe and has often outperformed comparable developed market fare</a>. 

China, Russia, Indonesia and Brazil combine for almost 39% of HYEM's country weight and the fund has a rival in the form of the...

iShares Emerging Markets High Yield Bond Fund (BATS: EMHY)
This ETF actually debuted the same day as HYEM and charges more (0.65% compared to 0.4% for HYEM). EMHY is another fine example of look before you claim that junk bonds aren't in style anymore. Less than two months old and with a country mix that includes the likes of Venezuela, Nigeria, Lebanon, Ukraine and Hungary, EMHY has still managed to attract more than $14 million in AUM. HYEM and EMHY are the first two ETFs devoted to emerging markets corporate junk bonds.

iShares Global ex USD High Yield Corporate Bond Fund (BATS: HYXU)
In the current market environment, owning HYXU is going to take some fortitude because "ex-USD" really means a 79.5% allocation to euro-denominated bonds. That probably explains why the new fund (it debuted April 3) has lost 6.6%. With an expense ratio of 0.4%, HYXU holds 102 issues and has over $23 million in AUM.

Other funds to consider: The iShares B - Ca Rated Corporate Bond Fund (BATS: QLTC), which debuted in late April, and the Market Vectors LatAm Aggregate Bond ETF (NYSE: <a class="ticker" href="/stock/bono#NYSE">BONO</a>), which does have some exposure to non-investment grade Latin American bonds.

Wall Street Journal

Movers

BONO

EMHY

HYXU

QLTC

The Definitive Guide to Junk Bond ETFs (HYG, JNK, SJNK)

The virtues of dividend investing cannot be diminished, particularly in a topsy-turvy market environment such as the one investors are coping with right now. Fortunately, there are <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/05/2571552/checking-in-do-the-dew">hundreds of dividend ETFs that can help investors endure the volatility and generate some income along the way</a>.

While there is such a thing as a non-cash dividend, most dividends are paid in cash and that's means more money and only the baby in those lame Capital One (NYSE: <a class="ticker" href="/stock/cof#NYSE">COF</a>) commercials starring Jimmy Fallon doesn't like more money. 

Some investors like money via dividends so much that they opt for monthly dividend stocks. As we recently highlighted, <a href="http://www.benzinga.com/markets/bonds/12/04/2513684/4-etfs-for-monthly-dividend-hunters-sdiv-pcy-csj">there are some ETFs on the market that will line your pockets 12 times a year</a>. 

That search turned up some interesting finds, including two bond funds, a fund of funds and an international developed market equity play. The good news is that our previous search did not include all of the monthly dividend ETFs on the market and we're back with more solid ideas today.

Market Vectors EM Local Currency Bond ETF (NYSE: <a class="ticker" href="/stock/emlc#NYSE">EMLC</a>)
For those that didn't get the memo, <a href="http://www.benzinga.com/markets/bonds/12/05/2573177/a-look-at-the-new-em-junk-bond-etf-hyem">emerging markets bond ETFs are becoming a big deal these days</a> and Van Eck's Market Vectors is helping lead that charge. 

The PowerShares Emerging Markets Sovereign Debt ETF (NYSE: <a class="ticker" href="/stock/pcy#NYSE">PCY</a>) made our previous list of monthly dividend ETFs, but that fund's holdings are denominated in U.S. dollars. EMLC, which has almost $736 million in AUM and focuses primarily on investment-grade issues, takes the local currency angle. Brazil, Poland, South Africa, Mexico and Malaysia combine for almost half of EMLC's country weight and the fund currently yields over 5% with a monthly payout.

PowerShares High Yield Equity Dividend Achievers Portfolio (NYSE: <a class="ticker" href="/stock/pey#NYSE">PEY</a>)
PEY, which will turn eight years old later this year, is home to 50 stocks and $273 million in AUM. While PCY is heavy on small-cap value names (almost 44% of the fund's weight), the fund holds plenty of familiar blue chip dividend plays such as AT&amp;T (NYSE: <a class="ticker" href="/stock/t#NYSE">T</a>), Altria (NYSE: <a class="ticker" href="/stock/mo#NYSE">MO</a>) and Johnson &amp; Johnson (NYSE: <a class="ticker" href="/stock/jnj#NYSE">JNJ</a>). This monthly dividend payer has a trailing 12-month yield of almost 3.7%.

WisdomTree Emerging Markets Local Debt Fund (NYSE: <a class="ticker" href="/stock/eld#NYSE">ELD</a>)
A primary rival to EMLC, the WisdomTree Emerging Markets Local Debt Fund is an ETF with plenty of superlatives. With an expense ratio of 0.55%, it's relatively cheap for an actively managed ETF. With over $1.2 billion in AUM, it's one of the largest actively managed ETFs. The fund is up almost 7% year-to-date and has a 30-day SEC yield north of 5%. Add to all that, investors can count on monthly income from this fund.

Market Vectors International High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/ihy#NYSE">IHY</a>)
Or the iShares Global ex USD High Yield Corporate Bond Fund (BATS: HYXU). The pair debuted on April 3, marking the start of <a href="http://www.benzinga.com/markets/bonds/12/04/2496443/etf-showdown-jumping-for-junk-hyg-ihy-hyxu">what could be an interesting ETF rivalry</a>. 

Both ETFs feature non-U.S. issues denominated in Euros, U.S. dollars, Canadian dollars or pounds sterling and both have expense ratios of 0.4%. About 77% of IHY's holdings are rated BB or B with 15.6% not rated by S&amp;P. HYXU offers scant investment grade exposure and about 71% of its issues are found in BB+ to B- universe. Only 7.4% of HYXU's issues aren't rated by S&amp;P. 

About a third of IHY's holdings hail from the emerging markets universe while HYXU is entirely devoted to developed markets. According <a href="http://vaneck.com/funds/IHY.aspx">to the Van Eck Web site</a> IHY has a 30-day SEC yield of 6.94% and is expected to pay its dividend monthly and that could make it the preferred play for income investors.

For more on monthly dividend ETFs, please click <a href="http://www.benzinga.com/markets/bonds/12/04/2513684/4-etfs-for-monthly-dividend-hunters-sdiv-pcy-csj">HERE</a>.

ETFs on the Market that will Line Your Pockets 12 Times a Year

There's no doubt the pace of <a href="http://www.benzinga.com/markets/bonds/12/04/2541589/4-junk-bond-etfs-your-broker-forgot-to-mention-sjnk-ihy-emhy">new emerging markets bond ETF introductions has been impressive in 2012</a>. 

Since the start of April alone, iShares, the world's ETF issuer, has introduced four international bond funds. Van Eck Global, the fifth-largest U.S. ETF firm and parent company of Market Vectors, has rolled out two global bond ETFs in the last month to go along with several previously existing that focused on non-U.S. bond markets.

While investors have shown a willingness to pour cash into emerging markets bonds funds, the WisdomTree Emerging Markets Corporate Bond Fund (Nasdaq: <a class="ticker" href="/stock/emcb#Nasdaq">EMCB</a>) has $60.5 million in AUM in just two months of trading and that's just one example, their hunt for global yield might be overlooking one critical factor: Emerging markets default rates. 

Default rates are a factor to consider when investing in any number of bond funds, but the risk obviously rises in the high-yield universe and some investors might be prone to believe default rates escalate in emerging markets as well. 

Market Vectors high-yield debt portfolio manager Fran Rodilosso said default rates rose in the first quarter, but added credit metrics across regions and sectors remain stable. 

"Although, in my opinion, we may be closer to the top of the credit cycle than the bottom," Rodilosso said in a statement. "Balance sheets for issuers in emerging markets are still relatively healthy and liquidity is still readily available. Of course, some companies are to be avoided due to balance sheet and management issues, but we see no indication that systemic issues caused rising default rates." 

Granted, Rodilosso has some skin in the game as he manages the newly minted Market Vectors Fallen Angel High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/angl#NYSE">ANGL</a>) and the Market Vectors International High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/ihy#NYSE">IHY</a>). ANGL is more domestic in scope, but IHY is purely global and features a 33% allocation to emerging markets bonds.

Since its debut on April 3, IHY has raked in $20 million in AUM. IHY debuted on the same day as the iShares Global ex USD High Yield Corporate Bond Fund (BATS: HYXU) and the iShares Emerging Markets High Yield Bond Fund (BATS: EMHY). HYXU has attracted almost $25 million in AUM while investors have poured more than $10 million into EMHY.

Rodilosso isn't alone in his view that emerging markets bonds are still a generally healthy asset class. Earlier this week, Russ Koesterich, iShares Global Chief Investment Strategist, reiterated his view that income investors <a href="http://www.benzinga.com/analyst-ratings/analyst-color/12/04/2543665/koesterich-highs-em-bond-opportunities-emb-lemb-pcy#ixzz1tpHBacQW"> should consider emerging markets bonds for their fixed income portfolios</a>. 

In a note published on the iShares blog, Koesterich wrote "...emerging markets exited the financial crisis in a far better position than their developed market counterparts. The average debt burden of emerging markets is less than 40% of gross domestic product, while developed market debt has soared to more than 100% of GDP on average."

Even though corporate and sovereign balance sheets in the emerging world are mostly health and several marquee developing markets could see their credit ratings lifted in the near-term, Colombia and Indonesia come to mind as potential candidates, investors appear to be focused on yield.

Who could blame them? IHY could yield over 8% and pay a monthly dividend. The WisdomTree Emerging Markets Corporate Bond Fund has a 30-day SEC yield north of 4.7%. The iShares Emerging Markets Local Currency Bond Fund (NYSE: <a class="ticker" href="/stock/lemb#NYSE">LEMB</a>) has a distribution yield of 4.7%. Those yields are all vastly superior to what an investor would get with a Treasuries ETF or the iShares iBoxx $ Investment Grade Corporate Bond Fund (NYSE: <a class="ticker" href="/stock/lqd#NYSE">LQD</a>).

For more on bond ETFs, please click <a href="http://www.benzinga.com/markets/bonds/12/04/2541589/4-junk-bond-etfs-your-broker-forgot-to-mention-sjnk-ihy-emhy">HERE</a>.

Economics

EM Bond ETFs: Trouble Ahead? (LEMB, IHY, HYXU)

It's the epitome of a catch-22: ETFs tracking non-investment grade bonds, also known as junk bonds, have become enormously popular with investors because of their robust yields. In this era of depressed interest rates, who could blame an income investor for entertaining the idea of taking one some added risk in pursuit of yields that are often north of 6% or 7%?

The catch-22 comes in the form of the aforementioned added risk, which can mean a variety of unsavory issues including <a href="http://www.zerohedge.com/news/scariest-chart-high-yield-bond-holders">liquidity concerns, share creation issues, significant discounts to an ETF's net asset value and outright underperformance</a>.

That's right. Investors that are taking on the potential risks of a junk bond ETF may be compensated with yield, but these days <a href="http://finance.yahoo.com/news/beware-junk-bond-etf-boom-131956534.html">it sure looks like investor inflows are outpacing the returns offered by these ETFs</a>. 

The iShares iBoxx $ High Yield Corporate Bond ETF (NYSE: <a class="ticker" href="/stock/hyg#NYSE">HYG</a>) and the SPDR Barclays Capital High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/jnk#NYSE">JNK</a>) are home to $14.9 billion and $11.8 billion in assets under management, respectively. Year-to-date, the SPDR S&amp;P 500 (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>) has offered nearly quadruple the returns of JNK and almost seven times the returns offered by HYG.

Even with those warning flags, the number of <a href="http://www.benzinga.com/markets/bonds/12/04/2488481/a-look-at-the-fallen-angel-bond-etf-angl-ihy-hyg">junk bond ETFs continues to proliferate</a>. Sometimes, it's a matter of "if you build it, they will come" with ETF sponsors and investors and those willing to incur the risks of these ETFs might want to consider some other funds besides the stalwarts of HYG and JNK. Here are some junk bond ETFs your broker probably forgot to mention.

SPDR Barclays Capital Short Term High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/sjnk#NYSE">SJNK</a>)
The SPDR Barclays Capital Short Term High Yield Bond ETF debuted six weeks ago as the short-term cousin to JNK. In those six weeks, SJNK has proven to be just one more example of how much investors love junk bond ETFs as the fund has raked in almost $60 million in AUM. 

SJNK, which charges an expense ratio of 0.4%, same as JNK, tracks dollar-denominated non-investment grade junk bonds that have a remaining maturity of less than 5 years regardless of optionality. SJNK's index only tracks corporate issues from the financial services, industrials and utilities sectors. SJNK has a current yield of 7.9%.

Market Vectors Fallen Angel High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/angl#NYSE">ANGL</a>)
This little ANGL debuted earlier this month and has already attracted $10.1 million in AUM and the new fund has a little something different to offer compared to the usual junk bond funds. So-called fallen angel companies are typically large, familiar companies that have lost investment-grade status where as many companies issuing high-yield bonds are smaller, more obscure and have never had investment-grade status.

As Benzinga reported earlier this month, <a href="http://www.benzinga.com/markets/bonds/12/04/2488481/a-look-at-the-fallen-angel-bond-etf-angl-ihy-hyg">ANGL's index has performed well over the past eight years and nearly a third of fallen angels find their way to investment -grade status</a>. ANGL also has fees of 0.4%.

Market Vectors International High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/ihy#NYSE">IHY</a>)
Another new addition to the junk bond ETF party, the Market Vectors International High Yield Bond ETF debuted on April 3 and is off to a fine start with almost $20 million in AUM. IHY, which is expected to pay a monthly dividend, features issues denominated in Euros, U.S. dollars, Canadian dollars or pound sterling issued in the major domestic or Eurobond markets.

Yield data isn't available yet for IHY, but when the fund debuted, Van Eck said the index IHY tracks had a yield of 8.3%. With an expense ratio of 0.4%, a third of IHY's holdings are emerging markets fare. 

iShares Emerging Markets High Yield Bond Fund (BATS: IMHY)
Risk-takers might love the iShares Emerging Markets High Yield Bond Fund, which obviously focuses on non-investment grade EM bonds. IMHY debuted the same day as IHY, but features higher fees at 0.65%. While it should be noted that almost 11% of the new fund's weight is allocated to the U.S., this ETF does not skimp on allocations to markets that most investors would consider risky. 

Venezuela is IMHY's top country weight at over 14% while Nigeria, Lebanon, Ukraine and Hungary are also found among the top-10 country weights.

For more on junk bond ETFs, please click <a href="http://www.benzinga.com/markets/bonds/12/04/2496443/etf-showdown-jumping-for-junk-hyg-ihy-hyxu">HERE</a>.

4 Junk Bond ETFs Your Broker Forgot to Mention (SJNK, IHY, EMHY)

In a market environment that seems to be putting a premium on eschewing risk, it might not feel like like the right time to be embracing high-yield, or junk, bonds. The iShares iBoxx $ High Yield Corporate Bond ETF (NYSE: <a class="ticker" href="/stock/hyg#NYSE">HYG</a>) and the SPDR Barclays Capital High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/jnk#NYSE">JNK</a>), two of the largest junk bond ETFs, haven't exactly been slammed recently, but neither is setting the world on fire as both are down about 1% in the past month.

Simply put, there's a catch-22 investors have to contend with when it comes to junk bond ETFs. Yields on cash instruments are anemic and will remain so for at least another two years because the Federal Reserve wants it that way. That makes junk bonds alluring. Still, this is a risk on asset class with a host of <a href="http://www.zerohedge.com/news/scariest-chart-high-yield-bond-holders">red flags</a> such as decompressed spreads, share creation problems and funds trading at substantial discounts to their net asset values, as Zero Hedge recently noted.

Even with the risks, ETF sponsors still keep churning out <a href="http://www.benzinga.com/markets/bonds/12/04/2466846/3-new-bond-etfs-debut-tuesday-ihy-emhy-emcb">new junk bond ETFs</a> and April has brought an increased pace of high-yield bond ETF debuts. 

Two of those funds square off in this week's "ETF Showdown," the iShares Global ex USD High Yield Corporate Bond Fund (BATS: HYXU) and the Market Vectors International High-Yield Bond ETF (NYSE: <a class="ticker" href="/stock/ihy#NYSE">IHY</a>). 

Both funds debuted on April 3 and have thus far done an excellent job of attracting assets from investors. IHY is now home to $19.6 million in assets under management while HYXU has $24.4 million in AUM, two sturdy totals for less than two weeks of life.

Both ETFs feature non-U.S. issues denominated in Euros, U.S. dollars, Canadian dollars or pounds sterling. More than 79% of HYXU's holdings are euro-denominated. Both funds have expense ratios of 0.4%. 

IHY is heavy on industrial and financial services names at the sector level, though the industrials umbrella includes energy, health care, technology and telecom, just to name a few. Industrials, consumer goods and conumer staples account for almost two-thirds of HYXU's weight. 

Looking at the credit quality of the two funds as rated by Standard &amp; Poor's, IHY actually has 4.3% allocation to BBB-rated issues and that's an investment-grade rating. About 77% of the fund is rated BB or B with 15.6% of IHY's issues not rated by S&amp;P. HYXU offers scant investment grade exposure and about 71% of its issues are found in BB+ to B- universe. Only 7.4% of HYXU's issues aren't rated by S&amp;P.

Pertaining to IHY, as of March 27, the index tracked by the ETF featured just over 1,000 non-investment grade issues of 546 corporations located in 69 countries, including a 33% allocation to emerging markets bonds, Van Eck <a href="http://www.benzinga.com/markets/bonds/12/04/2470900/a-look-at-the-new-global-junk-bond-etf-ihy-emlc-chlc#ixzz1rxpG5cVQ">said in a statement</a>.

On the other hand, eight countries are found in HYXU's lineup, including six Euro Zone members. The U.K. and Canada are the exceptions. 

Again, there are risks with junk bond ETFs. As Market Vectors notes on its Web site: "The secondary market for securities high yield securities may be less liquid than the markets for higher quality securities and, as such, may have an adverse effect on the market prices of certain securities."

Not to mention, if HYXU and IYU start trading at steep discounts to their NAVs, a potentially punishing <a href="http://www.zerohedge.com/news/danger-hy-etfs">arbitrage opportunity could arise</a> where traders go long junk bond ETFs while shorting the bonds in a particular ETF's index. Translation: Junk bonds never have been and never will be for the faint of heart.

All that said, should IHY and HYXU be deemed worthy of your investment dollars, opt for IHY due it emerging markets exposure and probably monthly dividend. HYXU's Euro Zone-heavy lineup could be in for more credit downgrades, deeper moves into junk status and higher yields.

ETF Showdown: Jumping For Junk (HYG, IHY, HYXU)

Following <a href="http://www.benzinga.com/markets/bonds/12/04/2470900/a-look-at-the-new-global-junk-bond-etf-ihy-emlc-chlc">last week's introduction</a> of the Market Vectors International High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/ihy#NYSE">IHY</a>), Van Eck Global's Market Vectors unit is again adding to its bond ETF with the debut of the Market Vectors Fallen Angel High Yield Bond ETF (NYSE: ANGL). ANGL tracks the Bank of America Merrill Lynch U.S. Fallen Angel High Yield Index and features and expense ratio of 0.4%, the same as IHY.

ANGL's index is comprised of below investment-grade corporate bonds denominated in U.S. dollars that were rated investment grade at time of issuance. Bonds may have been issued by either U.S. or non-U.S. issuers, but qualifying securities must be issued in U.S. dollars in the U.S. domestic market for inclusion in the index, according to a statement issued by Market Vectors.

So-called fallen angel issuers are different from the usual suspects in the junk bond universe for several reasons. First and foremost, fallen angel companies are typically large, familiar companies that have lost investment-grade status where as many companies issuing high-yield bonds are smaller, more obscure and have never had investment-grade status.

Market Vectors noted familiar fallen angels include Ford (NYSE: <a class="ticker" href="/stock/f#NYSE">F</a>) and J.C. Penney (NYSE: <a class="ticker" href="/stock/jcp#NYSE">JCP</a>). 

“Although they were downgraded from investment grade status, many Fallen Angel issuers still retain a capital structure similar to investment grade issuers, which may enable Fallen Angel issuers to enjoy greater financing flexibility than original issue high yield issuers,” said Fran Rodilosso, Fixed Income Portfolio Manager at Van Eck, in the statement. 

“Many investors overlook Fallen Angels, but historical data shows that in six of the past nine years ending in 2011, the U.S. dollar denominated Fallen Angels, as represented by The BofA Merrill Lynch U.S. Fallen Angel High Yield Index, have outperformed general U.S. dollar denominated corporate high yield bonds, as represented by The Barclays Capital High Yield Very Liquid Index," Rodilosso added.

Market Vectors data show $10,000 invested in ANGL's index in 2003 would be worth over $26,700 today while the same amount invested in the Barclay High Yield Very Liquid Index would be worth just $24,554 today. Fallen Angel bonds are typically more concentrated in the BB area of the ratings spectrum while other junk bonds are found more in the B and CCC areas. Nearly 48% of the issues in ANGL are rated BBB.

Nearly a third of fallen angels find their way to investment -grade status, according to Market Vectors. ANGL's top-10 holdings include issues from Ford, J.C. Penney, Masco (NYSE: <a class="ticker" href="/stock/mas#NYSE">MAS</a>), Limited Brands (NYSE: <a class="ticker" href="/stock/ltd#NYSE">LTD</a>) and Frontier Communications (Nasdaq: <a class="ticker" href="/stock/ftr#Nasdaq">FTR</a>).

ANGL is the 47th Market Vectors ETFT and the firm's 14th bond fund. The Market Vectors family currently totals $23.7 billion in assets under management, making it the fifth largest ETF family in the U.S. and the ninth largest worldwide. With over $14.3 billion in AUM, the iShares iBoxx $ High Yield Corporate Bond Fund (NYSE: <a class="ticker" href="/stock/hyg#NYSE">HYG</a>) is the largest junk bond ETF listed in the U.S.

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VanEck International High Yield Bond ETF

Overview

VanEck International High Yield Bond ETF (ARCA:IHY), Quote.Headers.trade-ideas