EMLC Profile
The VanEck J.P. Morgan EM Local Currency Bond ETF is designed to provide investors with exposure to bonds issued by emerging market governments that are denominated in the local currencies of these issuers. The fund's primary objective is to track the performance of its benchmark index, which consists of a broad range of local currency-denominated bonds issued by sovereign entities in emerging markets.
Under normal market conditions, the fund allocates at least 80% of its totalassets to securities that are components of the benchmark index. This ensures that the majority of the fund’s investments are directly aligned with the index, which focuses on government bonds issued in the local currencies of emerging market countries. By investing in these local currency bonds, the fund aims to capture the potential benefits of higher yields and diversification offered by emerging markets.
The index and, by extension, the fund may exhibit concentration in certain industries or groups of industries based on the composition of the index. This means that if the benchmark index is heavily weighted towards specific sectors or regions within the emerging markets, the fund's investments may also reflect this concentration. This concentration could lead to increased exposure to the economic and geopolitical risks associated with those sectors or regions.
As a non-diversified fund, the VanEck J.P. Morgan EM Local Currency Bond ETF may focus its investments within a narrower set of bonds compared to more diversified funds. This approach allows for targeted exposure to local currency debt in emerging markets but also involves risks related to the concentration of investments and fluctuations in local currencies. The fund is suited for investors seeking to capitalize on emerging market bond opportunities while accepting the associated risks of local currency exposure and sector concentration.
|
