The VanEck Emerging Markets Bond Fund was up 1.39% in April, compared to up 1.51% for its benchmark. Year-to-date, the fund is up 5.94%, compared to 4.84% for its benchmark. During April, China led outperformers; the team continues to see the worst of the Chinese property crisis as behind us. Underweights in Czechia and Malaysia led underperformers. We remain cautious on US dollar (USD) duration, USD spread duration, but open on local-currency duration. The fund has around 60% in curated local currency, 40% in USD bonds, with a noteworthy underweight to Brazil and South Africa in local currency. Carry is 8.2%, YTW is 9.9%, and duration is 5.3.

Last month we attended the IMF Spring Meetings. Read our key takeaways here.

Average Annual Total Returns^* (%) (In USD)

^* Returns less than one year are not annualized.

Expenses: Class A: Gross 1.83%, Net 1.21%; Class I: Gross 1.37%, Net 0.86%; Class Y: Gross 1.33%, Net 0.96%. Expenses are capped contractually until 05/01/26 at 1.20% for Class A, 0.85% for Class I, 0.95% for Class Y. Caps exclude acquired fund fees and expenses, interest, trading, dividends, and interest payments of securities sold short, taxes, and extraordinary expenses.

The performance data quoted represents past performance. Past performance is not a guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance may be lower or higher than performance data quoted. Please call 800.826.2333 or visit vaneck.com for performance current to the most recent month ended.

The “Net Asset Value” (NAV) of a Fund is determined at the close of each business day, and represents the dollar value of one share of the fund; it is calculated by taking the total assets of the fund, subtracting total liabilities, and dividing by the total number of shares outstanding. The NAV is not necessarily the same as the ETF’s intraday trading value. Investors should not expect to buy or sell shares at NAV.

Exposure Types and Significant Changes

The changes to our top positions are summarized below. Our largest positions in April were Mexico, Brazil, Thailand, South Africa, and Poland.

• We increased our local currency exposure in Brazil, Thailand, and South Africa. Brazil shows signs of tentative fiscal improvement, its direct trade exposure to the U.S. is limited, inflation expectations had peaked bringing us closer to the end of the tightening cycle. These factors improved the policy and technical test scores for the country. Thailand is a higher-yielding beneficiary of China’s restrained approach to the trade war, which improves its technical test score. South Africa’s budget debates are not over yet, but the main coalition partners confirmed that the government of national unity remains in place, improving the policy test score for the country.
• We also increased our hard currency sovereign exposure in Ecuador, Argentina, and Nigeria. In Ecuador, the incumbent’s victory in the presidential elections should strengthen the reform mandate and the country’s policy test score. Argentina just got a new IMF program, which was conditional on a major overhaul of the country’s exchange rate regime with a freer floating currency and no FX intervention within the currency band. This boosted Argentina’s policy test score. We continue to see more green shoots in the Nigerian economy, and 80% of Nigeria’s exports is oil, which is exempt from the tariffs, which strengthens the economic and technical test scores for the country.
• Finally, we increased our hard currency sovereign exposure in Gabon, Senegal, and Pakistan. In Gabon, we now have more certainty on the policy front after the former transitional president Nguema comfortably won the presidential election, improving the policy test score for the country.

  In Senegal, the IMF signaled that it is ready to move on a new program after the country addressed some data misreporting issues. This should strengthen the policy test score for Senegal. Pakistan’s valuations look better now, and the country’s direct exposure to the U.S. tariffs is limited. The U.S. is expected to keep Pakistan in its orbit for political reasons, and the IMF funding is expected to get unlocked after the board’s approval. In terms of our investment process, this improved the policy and technical test scores for the country.

• We reduced our local currency exposure in Indonesia, Chile, Mexico, and Turkey. The Indonesian government has a communication problem, especially as regards its fiscal plans against the backdrop of downside growth risks. The central bank’s focus on currency stability may limit room for rate cuts. In terms of our investment process, this weakens the policy test score for the country. The softening growth outlook in Chile’s main trade partners and its potential impact on demand for copper worsen the economic and technical test scores for the country. Mexico’s growth prospects can be also adversely affected by a rising risk of recession in the U.S. Turkey might be well positioned to deal with the trade war challenges, but its domestic political scene remains noisy, worsening the policy test score for the country.
• We also reduced our hard currency corporate exposure in China, Hong Kong, and Singapore. The main reasons are the negative and more direct impact of higher tariffs, and the non-zero risk of the renminbi’s devaluation to regain competitiveness.
• Finally, we reduced our hard currency sovereign exposure in Saudi Arabia, Bahrain, Bahamas, the Philippines, Cote d’Ivoire, and Papua New Guinea. The key concern in Saudi Arabia, Bahrain and the Philippines was the impact of the U.S. tariffs on inflation expectations and duration. The tariffs’ negative impact on lower-income fragile economies was the main consideration in Cote d’Ivoire and Papua New Guinea. In terms of our investment process, this has worsened the technical test score for these countries.

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