VanEck has rolled out the VanEck Vectors JP Morgan EM Local Currency Bond UCITS ETF on Deutsche Börse’s Xetra and Frankfurt exchanges (Ticker: G2X1).

The VanEck Vectors JP Morgan EM Local Currency Bond UCITS ETF offers investors access to high yields with the possibility to benefit from currency appreciation.

The cross-listing follows shortly after the fund’s initial launch on the London Stock Exchange (Ticker: EMLC) last week.

The fund tracks the JP Morgan GBI-EMG Core Index, a reference for the performance of bonds issued in local currencies by 16 emerging market governments: Argentina, Brazil, Chile, Colombia, Hungary, Indonesia, Malaysia, Mexico, Peru, Philippines, Poland, Romania, Russia, Thailand, Turkey, and South Africa. The fund trades in US dollars.

The index is market-cap weighted and rebalanced monthly, with individual country exposure capped at 10% to enhance diversification. A country floor of 3% is also applied.

There are over 200 holdings in the index; the ETF itself holds 80 securities as it pursues a sampled replication approach to index tracking. Bonds from Brazil, Poland, Indonesia and Mexico each make up approximately the maximum allowable weighting of 10% in the ETF, while South Africa (9.1%), Turkey (7.0%) and Colombia (6.6%) make up the next largest country exposures.

Investors may be surprised to learn that the majority of the ETF’s holdings are of investment grade quality (58.2%), composed primarily of bonds rated ‘A’ (20.2%) and ‘BBB’ (37.7%). Bonds rated ‘BB’ make up 14.0% while a portion of unrated bonds accounts for 24.8%.

The ETF may suit investors seeking higher income opportunities as the index’s current yield to maturity is 6.4%. The index’s effective duration is 5.0 years and is up 6.4% year to date. (All data as of 28 April 2017).

Shortly after launch, VanEck lowered the total expense ratio for the fund from 0.47% to 0.44%.