HYEM vs VEMY

HYEMBVanEck Emerging Markets High Yield Bond ETF

VEMYCVirtus Stone Harbor Emerging Markets 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.

VEMY Its high-yield cohort is mostly cheap US junk-bond index funds. VEMY goes the other way: an actively run book of emerging-market sovereign and corporate debt, roughly 190 bonds, paying monthly.

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.

VEMY The Fund invests at least 80% of its assets, under normal circumstances, in high-yield bonds economically tied to emerging-market countries.

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.

• VEMY A real outlier in the high-yield aisle: at least 80% of assets in bonds tied to emerging-market countries, not the US corporate credit the top-ranked funds beside it hold.
• Stone Harbor is a dedicated emerging-market debt shop, now a Virtus affiliate. VEMY was its first ETF, launched in 2022.stockanalysis.com
• No index to hug. Managers choose the issuers across sovereign and corporate emerging-market debt, roughly 190 bonds, and cash lands monthly.stockanalysis.com

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.

• VEMY At 0.55% a year it runs above the 0.40% cohort median and several times index peers like SCYB (0.03%) and SPHY (0.05%). Specialist credit work costs more than tracking.
• Thinly traded. Spreads can widen, so limit orders matter more here than in the giant broad high-yield funds.
• Small fund, launched in 2022, so the record is short. Emerging-market credit also carries sovereign and political risk that US-only high-yield funds don't take on.

Full HYEM profile⁠

Full VEMY profile⁠