HYEM vs IHY

HYEMBVanEck Emerging Markets High Yield Bond ETF

IHYBVanEck International High Yield Bond ETF

In short

HYEM Most funds in the high yield aisle buy American junk. HYEM leaves the country: a passive index of emerging markets corporate high yield, roughly 500 bonds deep, trading since 2012 and paying monthly.

IHY Most high yield ETFs are a bet on American borrowers. IHY flips the map: junk-rated bonds from non-US companies only, issued in dollars, euros, sterling and Canadian dollars, with no issuer allowed to hog the portfolio.

Stated mandate

HYEM HYEM seeks to track, before fees and expenses, the price and yield performance of the ICE BofA Diversified High Yield US Emerging Markets Corporate Plus Index.

IHY The fund seeks to track, before fees and expenses, the price and yield performance of the ICE BofA Global ex-US Issuers High Yield Constrained Index.

Why people hold it

• HYEM A specialist, not a core holding. It passively tracks an ICE BofA index of emerging markets high yield corporate bonds, a corner most funds in this cohort never touch.
• Spread thin on purpose: roughly 500 bonds, so no single issuer or borrower carries the fund.
• Running since 2012 and paying monthly, with a 0.40% fee that lands right at the median for high yield bond ETFs.
• Lands in the upper half of a crowded high yield field, helped by its broad bond lineup and how smoothly it trades.

• IHY The ex-US specialist in a cohort where the household names all buy US corporate paper. Its index takes below investment grade bonds from non-US issuers in the major domestic and Eurobond markets.vaneck.com
• No single borrower can dominate. The index caps any one issuer at 3%, trimming the outliers, and the fund spreads across roughly 500 bonds.vaneck.com
• Four currencies of issuance (US dollar, euro, pound sterling, Canadian dollar) widen the opportunity set well beyond the dollar-only high yield market.vaneck.com
• Running since 2012 with monthly distributions and a plain passive index mandate. Long history for such a narrow corner of the bond market.

Worth knowing

• HYEM That 0.40% is median for the category but many times what plain US junk funds charge (SCYB at 0.03%, SPHY at 0.05%). The fee buys the emerging markets mandate, not broad high yield beta.
• Emerging markets credit stacks country and political risk on top of ordinary default risk, so it can behave quite differently from US high yield.
• Moderately traded rather than a giant of the aisle, so limit orders and size discipline matter more here than in the mega-funds.

• IHY Small and thinly traded, so bid-ask spreads tend to run wider than the category's giants. Trade size and timing matter more here.
• 0.40% is the cohort median, but the largest US-focused peers (SCYB, SPHY, USHY) charge a fraction of that. The ex-US mandate is what you're paying up for.
• Monthly payouts can include return of capital, which the fund discloses. Part of a distribution may be your own principal coming back.

Full HYEM profile⁠

Full IHY profile⁠