Van Eck Associates Corporation lowered the expense cap for its Market Vectors Emerging Markets Local Currency ETF (NYSE Arca: EMLC) from 49 basis points (bps) to 47 bps, effective September 1, 2012. The expense cap is effective through September 1, 2013 and excludes certain expenses, such as interest.
EMLC seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the J.P. Morgan GBI-EMG Core Index (GBIEMCOR), a rules-based, market capitalization-weighted index that is designed to be investible and includes only those countries that are accessible by most of the international investor base.
“We’re pleased to lower EMLC’s expense cap, which already had the lowest net expense ratio among the EM local currency and dollar-denominated ETFs in the marketplace,” said Adam Phillips, Chief Operating Officer of Market Vectors ETFs. “Wherever possible, we look to reduce fees and expenses and pass those savings along to investors.”
EMLC was the first U.S.-listed ETF to focus on local currency-denominated bonds of emerging markets governments at the time of its launch, and currently has over $791 million in AUM. The Fund was recently joined in the Market Vectors ETF lineup by another first-of-its-kind offering in emerging markets, Emerging Markets High Yield Bond ETF (NYSE Arca: HYEM), launched in May 2012 which seeks to track an index that focuses exclusively on dollar-denominated high-yield corporate bonds issued by companies from emerging markets countries. Together, EMLC and HYEM provide two different ways to invest in emerging markets debt.“The development of EM debt markets over the past several years has been impressive”, said Ed Lopez, Marketing Director at Market Vectors ETFs. “Low default rates among corporate bond issuers, investment grade credit ratings among most sovereign issuers in EMLC’s index and generally higher yields currently than comparable developed world issuers make a compelling case for investing in emerging market bonds.”