Van Eck Global launches Market Vectors LatAm Aggregate Bond ETF

By Melissa Kory

Cleveland, May 12 - Van Eck Global announced that it launched the Market Vectors LatAm Aggregate Bond ETF, an exchange-traded fund that seeks to track the BofA Merrill Lynch Broad Latin America Bond index, an index consisting of a portfolio of sovereign and corporate debt securities issued by Latin American issuers and denominated in dollars, euros and local currencies.

"Local debt markets in Latin America have been maturing quickly in recent years," Jan van Eck, principal at Van Eck Global, said in a news release.

"Governments have limited their reliance on borrowing abroad, infrastructure projects are proliferating throughout the region and better transparency has led to improved sovereign credit ratings."

These factors, coupled with relatively high yields, have increased foreign-investment demand for the region's sovereign and corporate debt.

The fund carries a gross expense ratio of 0.56% and a net expense ratio of 0.49%. Expenses are capped contractually until Sept. 1, 2012 and exclude certain expenses, such as interest.

As of April 30, the index included 453 constituents and had an average yield-to-worst of 7.27% with top country allocations as follows: Brazil at 36.52%, Mexico 29.03%, Colombia 12.19%, Venezuela 6.50% and Argentina 4.17%.

The index is market-cap weighted, subject to a 20% cap on individual issuer exposures.

Van Eck Global is a New York-based asset manager.

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