VanEck iBoxx EUR Corporate UCITS ETF
- Access to 40 largest and most liquid Euro-denominated corporate bonds
- Only bonds with an investment grade rating
- ESG integration
Companies need to raise capital regularly to grow, and they do so regularly through the bond markets. Such bond issues would usually offer higher yields compared to government bonds to compensate for their credit risk. After years of low yields, corporate bonds have seemingly gotten their shine back once central banks started raising interest rates. If you are looking to invest in bonds, you could consider VanEck’s Corporate Bonds ETF, which provides an ESG-integrated vehicle to invest in 40 largest and most liquid EUR bonds.
Corporate bonds generally offer higher yields compared to government bonds. This is because corporate issuers typically need to compensate for the additional credit risk they carry compared to bonds of sovereign bonds.
Our Corporate Bonds ETF delivers a blend of low cost and high quality. For the risks involved in investing in a Corporate Bonds ETF, including Changes in Interest Rates, Credit Risk and Liquidity Risk please refer to the Risk Factors section below.
Credit risk refers to the issuer’s probability of default, meaning they failed to pay out a loan or meet their financial obligations. Such event would result in financial loss for the lender or creditor. The potential loss amount would depend on the bond’s probability of default and its recovery rate.
Credit risk is normally higher for corporate entities than for government bonds, since they are only backed by the company cash flows and are therefore perceived to be riskier. Companies with a higher perceived level of credit risk would be forced to offer higher interest payments to compensate for the higher probability of default.
Corporate Bonds ETFs Have Historically Offered Higher Yields Compared to Government Bond ETFs
* Past performance is not a reliable indicator for future performance. Source: VanEck. Yield is represented by Yield-to-Worst.
% of Net
|Dh Europe Finance Ii Sarl||1845000||4.50|
|Novartis Finance Sa||1629000||4.23|
|Jpmorgan Chase & Co||1437000||3.94|
|Thermo Fisher Scientific Finance I Bv||1523000||3.84|
|Ubs Group Ag||1051000||3.74|
|Mercedes-Benz International Finance Bv||1129000||3.42|
|Anheuser-Busch Inbev Sa/Nv||1112000||3.26|
|Hsbc Holdings Plc||1096000||3.23|
|Goldman Sachs Group Inc/The||1055000||3.23|
|Top 10 Total (%)||36.56|