EMHY Profile
The iShares J.P. Morgan EM High Yield Bond ETF is designed to provide investors with exposure to high-yield, emerging market debt. The fund's investment strategy centers around allocating at least 80% of its assets to the component securities of its underlying index, which is aimed at capturing the performance of lower-rated, high-yield bonds within emerging markets. This index includes U.S. dollar-denominated, fixed and floating-rate debt issued by a range of entities including corporations, sovereign governments, and quasi-sovereign organizations.
To maintain alignment with the underlying index, the fund invests at least 90% of its assets in fixed income securities that are representative of the index. This approach ensures that the ETF closely tracks the performance of its benchmark, focusing on securities that contribute to high yield in emerging markets. The underlying index is designed to encompass a broad spectrum of high-yield debt, reflecting the diverse nature of emerging market economies and their debt issuers.
The ETF's strategy emphasizes high-yield bonds, which are typically issued by entities with lower credit ratings and offer higher interest rates to compensate for the increased risk. By targeting emerging markets, the fund seeks to capitalize on growth opportunities in developing economies, where high-yield debt can offer substantial returns. The index includes a mix of corporate, sovereign, and quasi-sovereign bonds, providing exposure to a variety of sectors and issuers within the emerging market space.
As a non-diversified fund, the iShares J.P. Morgan EM High Yield Bond ETF may hold concentrated positions in specific securities or sectors, which can impact its risk profile and performance. Investors should be mindful of the high-risk nature of high-yield bonds and the potential for volatility in emerging markets. The ETF offers a strategic option for those seeking higher income potential through exposure to emerging market debt while being aware of the inherent risks associated with lower-rated, high-yield securities.
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