Mon, Sep. 26, 1:54 PM
- WisdomTree Emerging Markets Local Debt Fund (NYSEARCA:ELD) - $0.1450.
- WisdomTree Emerging Markets Corporate Bond Fund (NASDAQ:EMCB) - $0.2100.
- WisdomTree BofA Merrill Lynch High Yield Bond Negative Duration Fund (NASDAQ:HYND) - $0.0800.
- WisdomTree BofA Merrill Lynch High Yield Bond Zero Duration Fund (NASDAQ:HYZD) - $0.1050.
- WisdomTree Fundamental U.S. Short-Term High Yield Corporate Bond Fund (BATS:SFHY) - $0.1850.
- Payable Sept. 30; for shareholders of record Sept. 28; ex-div Sept. 26.
- Press Release
Wed, Sep. 7, 10:20 AM
- That some investment-grade companies are issuing debt at negative yields seems crazy enough, but at least credits like Sanofi and Germany's Henkel can mostly be counted on the pay the money back.
- But how do investors justify paying to lend to junk-rated companies like Peugeot and HeidelbergCement, asks Lisa Abramowicz, noting their short-dated paper yields about zero, and is heading lower. Bank of America says the move to negative yields comes as fundamentals are actually deteriorating.
- "What, me worry," is the attitude at the ECB, whose PhDs are considering a further boost to its bond-buying program. BAML warns of a boomerang effect, where too-low yields spur a rapid rise in leverage, leading to downgrades, leading to paper ineligible for ECB purchase.
- In the meantime, the ECB program has spread globally, with investors turning to the next set of fixed-income assets with yields not requiring a microscope to see: Emerging market debt.
- ETFs: EMCB, HYEM, EMHY, PICB, IBND, CEMB
Nov. 23, 2015, 12:30 PM
- "Hazard ahead: The emerging market credit cycle has turned down," is the title of a recent JPMorgan report, arguing credit markets will tighten as the Fed boosts rates.
- A shoe not yet dropped, says the team, is that debt to GDP ratios are not decreasing.
- "Remember that a lot of the credit growth in emerging markets is no more than the flip side of easy money in developed markets," and as the Fed normalizes, this can reverse, though Europe and Japan keeping their feet on the gas pedal should mitigate the turn.
- The ratio of broad emerging market nonfinancial private credit to GDP hit 128% of GDP in Q1, up 51 percentage points from 2007. Exclude China, and the numbers are not nearly as gaudy, but still frothy, and the moves resemble those from that of developed markets in the years leading up to the global financial crisis.
- ETFs: EMB, PCY, TEI, EDF, ELD, EDD, EMLC, GHI, VWOB, EMD, EMCB, EDI, MSD, EMCD, EMHY, HYEM, SBW, LEMB, EMAG, CEMB, EBND, PFEM, EMSH, FEMB
Jul. 1, 2014, 3:45 AM
- Emerging market bond sales have soared past analyst estimates for the first half of 2014, as investors flock to higher yields. $268B of bonds sold so far this year, compared to the $240B sold in the same period of 2013.
- Due to a dovish Fed, U.S. yields have fallen this year to 2.5% from end-2013 levels of 3%. As a result, increased demand for higher yield has investors trading emerging market bonds despite geo-political risks.
- ETFs: EMB, PCY, ELD, EMLC, EMCB, VWOB, EMCD, HYEM, EMHY, LEMB, EMAG, CEMB, EBND, PFEM, EMSH, SEMF, IEMF, LEMF
Mar. 3, 2014, 4:32 PM
- Eyeing better growth and sustained low interest rates, Moody's projects the global default rate to drop to 2.2% this year or 61 companies globally, from 2.9% or 66 companies in 2012.
- "Additional factors that support our view of a low default rate in 2014 are the continuous accommodative monetary environment together with ample liquidity, which has and will continue to allow distressed companies to access the capital market and reduce refinancing risk in the near future."
- For perspective, the average default rate since 1983 is 4.7%. It is indeed a golden age for corporate borrowers.
- Related ETFs: LQD, VCSH, VCIT, CORP, VCLT, CSJ, EMCB, CIU, CFT, EMCD, SCPB, LWC, GHYG, CLY, IBND, ITR, CEMB, PICB, QLTA, GLCB, IGHG, SLQD, PFIG, IGS, CBND, IGU, QLTB
Feb. 12, 2014, 4:50 PM
- "The default rate is non-existent," he says, agreeing that fundamentals in high-yield look good. "Instead of a default cycle, we've had a refinance cycle." The issue, however, is valuation. At the end of 2013, the 30-year Treasury yielded about 4%, while BB corporates "unbelievably" yielded just 4.5% - a "remarkably low incremental yield."
- His feelings about overvaluation extend to the investment grade corporate market (LQD) as well.
- Most curious to Gundlach is how universally the long bond is hated at 4%, while junk yielding 4.5% gets so much love.
- Besides Treasurys, Gundlach sees value in emerging market bonds. The risk is in the currency, but this can be eliminated by buying dollar-denominated paper.
- High yield ETFs: HYG, JNK, HYLD, HYS, SJNK, PHB, BSJF, SJB, BSJE, HYHG, BSJG, BSJI, ANGL, BSJH, HYLS, XOVR, THHY, UJB, QLTC, SHYG, BSJK, HYZD, BSJJ, HYND
- Investment grade ETFs: LQD, VCSH, VCIT, CORP, VCLT, CSJ, CIU, CFT, SCPB, LWC, CLY, ITR, QLTA, IGHG, PFIG, SLQD, IGS, CBND, IGU, QLTB
- EM bond ETFs: EMB, PCY, ELD, EMLC, EMCB, VWOB, EMCD, ILB, HYEM, EMHY, LEMB, ITIP, EMAG, EBND, GTIP, PFEM, EMSH, SEMF, IEMF, LEMF
Jan. 7, 2014, 12:12 PM
- The EGShares TCW EM Short Term Investment Grade Bond ETF (SEMF), Intermediate Term Investment Grade Bond ETF (IEMF), and Long Term Investment Grade Bond ETF (LEMF) will begin trading on January 8th; offering exposure to both sovereign and corporate bonds.
- Each new fund will charge 0.65%, which is above the average expense ratio for this sector, but few funds currently offer specific duration exposure to emerging market bonds.
- Other emerging market bond ETFs: EMB, PCY, ELD, EMLC, EMCB, VWOB, ILB, EMCD, LEMB, ITIP, EBND, EMAG, GTIP, PFEM, EMSH
Nov. 21, 2013, 9:12 AM
- Emerging market bond ETF investors worried about duration risk will have their first short-duration fund to choose from starting today with the launch of ProShares' Short-Term USD Emerging Markets Bond ETF (EMSH). The fund has an expense ratio of 0.5%.
- The underlying index only selects paper with a fixed rate and maturity of 0-5 years, with a weighted average yield-to-maturity of three years or less. Sovereign, and corporate - both investment and speculative grade - will be included.
- As comparison, the iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) has a 7-year effective duration.
- Corporate EM bond ETFs: EMCB, EMCD, HYEM, EMHY
- Government EM bond ETFs: EMB, PCY, ELD, EMLC, ILB, LEMB, ITIP, EBND, GTIP, PFEM
Nov. 13, 2013, 11:33 AM
- Market Vectors files paperwork for the Emerging Markets Aggregate Bond ETF EMAG, with an after-fee-waiver annual expense ratio of 0.49%.
- The fund will hold both sovereign and corporate, and both investment grade and high-yield paper from a large number of emerging market countries. At the end of Q3, the tracked index held about 1,800 bonds from a total of 694 issuers.
- Market Vectors' Emerging Markets Local Currency Bond ETF (EMLC) has just over $1B in AUM.
- Related ETFs: EMB, PCY, ELD, EMLC, ILB, LEMB, ITIP, EBND, GTIP, PFEM, EMCB, EMCD, HYEM, EMHY
Nov. 1, 2012, 3:34 PM
Yield-starved investors are moving assets into emerging-market corporate debt ETFs, and the industry responds by upping the number of products offered to 10 from just 3 at the end of 2011. There's still plenty of room for growth - in total, such ETFs (a selection here) have about $1B AUM with the size of the EM corporate debt market at $776B. The largest U.S. corporate debt ETF, LQD alone has about $25B AUM.| Nov. 1, 2012, 3:34 PM
Aug. 13, 2012, 12:15 PM
Emerging debt remains remains frothy despite growing economic headwinds, writes Mike Riddell, noting an issue of long-term Peruvian debt last week hit a yield spread to Treasurys of just 109 bps. Given the bid-ask on this illiquid paper is 100 bps, it is pricing in almost no credit risk. It's pre-2008 territory. "Bubbletastic."| Aug. 13, 2012, 12:15 PM | 1 Comment
Jun. 12, 2012, 3:58 AMChina’s 4.2T yuan ($666B) corporate bond market is just 9% of its GDP and the government wants to change that, giving corporate bonds a bigger role in boosting growth and diverting risk from the state-owned banking system. Chinese regulators are positioning themselves to grow the sector. | Jun. 12, 2012, 3:58 AM
Jun. 7, 2012, 2:36 PMWhen life deals you lemons ... banks (particularly European ones) cutting back lending activity in Asia is leading to a ramp in the development of the corporate bond market there. Companies (ex-Japan) issued $398B in bonds last year, up 29% Y/Y as syndicated bank loans dove 44%. | Jun. 7, 2012, 2:36 PM
May 10, 2012, 3:18 PM
A new asset class - emerging market corporate debt (as opposed to sovereign) - is in the process of working its way into portfolios. "If we own corporate bonds and Treasury(s) in our fixed asset allocations here ... why not do the same abroad," says Josh Brown. Among the ETF offerings launched this year: EMCB, EMHY, HYEM, CEMB.| May 10, 2012, 3:18 PM | 1 Comment
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