Market Overview

A Lower Fee For This Emerging Markets Bond ETF

A Lower Fee For This Emerging Markets Bond ETF

The VanEck Vectors J.P. Morgan EM Local Currency Bond ETF (NYSE: EMLC) is one of the dominant names among emerging markets bond exchange traded funds. Going a step further, EMLC is perhaps the king of emerging markets bond ETFs where the fund's holdings are denominated in local currencies, not U.S. dollars.

Good news for investors: It just got a little cheaper to own EMLC.

New York-based VanEck said Wednesday it's lowering EMLC's annual fee to 0.44 percent from 0.47 percent. EMLC's new expense ratio works out to $44 per year on a $10,000 investment.

EMLC tracks the J.P. Morgan GBI-EMG Core Index (GBIEMCOR), "which is comprised of bonds issued by emerging market governments and denominated in the local currency of the issuer,” according to VanEck.

EMLC, which debuted in July 2010 and now holds $3.3 billion in assets under management, has nearly 250 holdings and a 30-day SEC of just over 5.7 percent.

“Investor interest in emerging markets bonds has continued this year due to their attractive yield potential and the stabilization and improvement in many emerging markets economies, which in the case of bonds denominated in local currencies may provide investors with the opportunity to benefit from currency appreciation,” Fran Rodilosso, head of fixed income at VanEck, said in a statement.

EMLC's four largest geographic weights are Mexico, Poland, Indonesia and Brazil with weights ranging from 9.9 percent for Mexico to almost 8.8 percent for Brazil. Brazil and Mexico are Latin America's two biggest economies. Overall, 18 countries are represented in EMLC.

“EMLC has attracted approximately $1.8 billion of inflows since January 2016 and, as of March 31, 2017, had over $3 billion in assets under management,” said VanEck in the statement. “VanEck regularly evaluates fund expenses to identify opportunities to lower shareholder costs. The reduction in EMLC’s expense cap allows investors to benefit from the economies of scale that have resulted from the significant asset growth over the past year.”

Posted-In: brazil Fran RodilossoLong Ideas Bonds Emerging Market ETFs Markets Trading Ideas ETFs Best of Benzinga


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