

LexAurum Advisors LLC purchased a new stake in VanEck Emerging Markets High Yield Bond ETF (NYSEARCA:HYEM) during the third quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission (SEC). The fund purchased 26,044 shares of the company's stock, valued at approximately $506,000. LexAurum Advisors LLC


The VanEck Emerging Markets High-Yield Bond ETF offers a 30-day SEC yield near 7% and a YTW of 7.30%, but current spread levels below 300 basis points, in my opinion, limit near-term upside. Over half of HYEM's portfolio sits in cyclical sectors like financials, energy, and basic materials, tying returns closely to commodity trends. With a duration near 3.5 years, HYEM's price reacts more to credit spread swings than to shifts in US interest rates.

Diversifying into foreign bond markets has been a win for US investors this year, based on a review of a set of ETFs through Aug. 27's close. The Vanguard Total Bond Market ETF, a proxy for government and investment‑grade corporates, is essentially flat, posting a fractional 0.2% rise.


Emerging market bonds offered some of the highest dividend yields in prior years. Returns were quite good too. Conditions for these securities have worsened, leading to comparatively weaker dividend yields and expected returns. HYEM is a high-yield emerging market bond ETF, negatively impacted by these trends.

