Market Overview

New China Bond ETF Named The Best Of 2014

New China Bond ETF Named The Best Of 2014 held its annual awards gala in New York last week to honor the best and brightest in the exchange-traded fund world. 

Funds, sponsors, and individuals that have made a significant impact on the industry were selected according to an open nomination process that was narrowed down by a selection committee of independent experts. 

Though this process, a consensus was reached that the Market Vectors ChinaAMC China Bond ETF (NYSE: CBON) was the Best New ETF of 2014.

This innovative product is the first of its kind to offer exposure to Renminbi-denominated bonds issued in mainland China.


CBON debuted in November 2014 as a way for U.S. investors to access local-currency denominated fixed-income assets in one of the world’s largest emerging economies. 

This ETF holds 27 securities spread among independent Chinese companies, governmental, and quasi-governmental issuers.  China Development Bank Corp is the largest single holding with 23.20 percent of the fund’s assets. 

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Ed Lopez, Marketing Director with Van Eck Global, noted that “China’s onshore bond market historically has had low correlation to other bond markets and core asset classes, and has delivered attractive yields in recent years, but it had been inaccessible to foreign investors. CBON was created as a direct solution to that problem.”

CBON currently has a 30-day SEC yield of 3.32 percent and income is paid monthly to shareholders.  In addition, the underlying holdings of this cutting-edge ETF are rebalanced on a monthly basis to ensure optimal tracking with the designated index.

To-date, investors have only placed $19.8 million in CBON.  However, broad emerging market plays such as the Market Vectors EM Local Currency Bond ETF (NYSE: EMLC) has been able to successfully accumulate $1 billion in assets.  EMLC does not contain exposure to China, which may make CBON an attractive holding to compliment other local currency funds.

It’s still too early to tell what the front runner will be for the Best New ETF of 2015.  However, the pace of innovative from fund providers will surely lead to several worthy candidates.


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