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Market Vectors International High Yield Bond ETF (IHY) Market Vectors Emerging Markets High Yield Bond ETF (HYEM)
ETF Disclosure
This material does not constitute an offer to sell or solicitation to buy any security, including shares of any Fund. An offer or solicitation will be made only through a Funds prospectus or summary prospectus and will be subject to the terms and conditions contained. This material and the information provided herein are not directed at or intended for distribution to any person (or entity) who is a citizen or resident of (or located or established in) any jurisdiction where the distribution of these materials and/or the purchase or sale of interests of a Fund would be contrary to applicable law or regulation or would subject a Fund to any registration or licensing requirement in such jurisdiction. Persons who wish to review this material are required to inform themselves about and to observe any legal or regulatory restrictions which may affect their eligibility to make an investment in a Fund. Professional advice should be sought in cases of doubt. THIS MATERIAL MAY ONLY BE PROVIDED TO YOU BY VAN ECK GLOBAL AND IS FOR YOUR PERSONAL USE ONLY AND MUST NOT BE PASSED ON TO THIRD PARTIES WITHOUT THE PRIOR EXPRESS WRITTEN CONSENT OF VAN ECK GLOBAL. IF YOU HAVE NOT RECEIVED THIS MATERIAL FROM VAN ECK GLOBAL, YOU ARE HEREBY NOTIFIED THAT YOU HAVE RECEIVED IT FROM A NON-AUTHORIZED SOURCE THAT DID NOT ACT ON BEHALF OF VAN ECK GLOBAL AND THAT ANY REVIEW, USE, DISSEMINATION, DISCLOSURE OR COPYING OF THIS MATERIAL IS STRICTLY PROHIBITED. BEFORE MAKING AN INVESTMENT DECISION, PLEASE CONSULT A QUALIFIED INVESTMENT AND TAX ADVISOR. Any projections, market outlooks or estimates in this material are forward-looking statements and are based upon certain assumptions that are solely the opinion of Van Eck Global. Any projections, outlooks or assumptions should not be construed to be indicative of the actual events which will occur. Further, any information regarding portfolio composition, portfolio composition methodology, investment process or limits, or valuation methods of evaluating companies and markets are intended as guidelines which may be modified or changed by Van Eck Global at any time in its sole discretion without notice. An investor cannot invest directly in an index. Returns reflect past performance of the Index and do not guarantee future results. Results reflect the reinvestment of dividends and capital gains, if any. Index returns do not represent Fund returns. The Index does not charge management fees or brokerage expenses, nor does the Index lend securities, and no revenues from securities lending were added to the performance shown. Fund performance information current to the most recent month end is available by calling 888.MKT.VCTR or by visiting marketvectorsetfs.com Forecasts, estimates, and certain information contained herein are based upon proprietary research and the information contained in this material is not intended to be, nor should it be construed or used as investment, tax or legal advice, any recommendation, or an offer to sell, or a solicitation of any offer to buy, an interest in any security. References to specific securities and their issuers or sectors are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities or gain exposure to such sectors. The Fund(s) may or may not own the securities or be exposed to the sectors referenced and, if such securities are owned or exposure maintained, no representation is being made that such securities will continue to be held or exposure maintained. NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE Van Eck Securities Corporation, Distributor 335 Madison Avenue, New York, NY 10017
ETF Disclosure
Net asset value (NAV) per share is calculated by subtracting total liabilities from the total assets, then dividing by the number of shares outstanding. Share price is the last price at which shares were traded on the Funds primary listing exchange. Fund shares may trade at, above or below NAV. Performance current to the most recent month end available by calling 888.MKT.VCTR or by visiting vaneck.com/etf.
Fund shares are not individually redeemable and will be issued and redeemed at their NAV only through certain authorized broker-dealers in large, specified blocks of shares called creation units and otherwise can be bought and sold only through exchange trading. Creation units are issued and redeemed principally in kind. Shares may trade at a premium or discount to their NAV in the secondary market. You will incur brokerage expenses when trading Fund shares in the secondary market. Past performance is no guarantee of future results. Returns for actual Fund investments may differ from what is shown because of differences in timing, the amount invested and fees and expenses. Investing involves substantial risk and high volatility, including possible loss of principal. Bonds and bond funds will decrease in value as interest rates rise. An investor should consider the investment objective, risks, charges and expenses of the Fund carefully before investing. To obtain a prospectus and summary prospectus, which contains this and other information, call 888.MKT.VCTR or visit marketvectorsetfs.com. Please read the prospectus and summary prospectus carefully before investing. Non-Van Eck Global proprietary information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of Van Eck Global. 2012, Van Eck Global. Principal International and Emerging Markets High Yield Risk Factors: Fixed income securities are subject to credit risk and interest rate risk. High yield bonds may be subject to greater risk of loss of income and principal and are likely to be more sensitive to adverse economic changes than higher rated securities. International investing involves additional risks which include greater market volatility, the availability of less reliable financial information, higher transactional and custody costs, taxation by foreign governments, decreased market liquidity and political instability. Changes in currency exchange rates may negatively impact the Funds return. Investments in emerging markets securities are subject to elevated risks which include, among others, expropriation, confiscatory taxation, issues with repatriation of investment income, limitations of foreign ownership, political instability, armed conflict and social instability. Investors should be willing to accept a high degree of volatility and the potential of significant loss. For a more complete description of these and other risks, please refer to the Funds prospectus.
Contents
International High-Yield Credit Market
Market Growth Corporate Financing Trends
13
15 18
2009
2011
Source: Bank of America Merrill Lynch Figures based on market value of high-yield corporate bonds in the BofA Merrill Lynch Global High Yield Index which encompasses below investment-grade corporate debt publicly issued in major domestic or Eurobond markets. Indexes are unmanaged and are not securities in which an investment can be made. See index descriptions on page 21. See disclaimers on pages 2 and 3.
Investment Grade
2003
2004
2005
2006
2007
2008
2009
2010
2011
Source: Bank of America Merrill Lynch. Figures based on market value of high-yield and investment grade corporate bonds in The BofA Merrill Lynch US Emerging Markets Liquid Corporate Plus Index. Indexes are unmanaged and are not securities in which an investment can be made. See index descriptions on page 21. See disclaimers on pages 2 and 3.
Source: Dealogic, SIFMA/AFME; European High Yield & Leveraged Loan Report, 2011 4Q See index descriptions on page 21. See disclaimers on pages 2 and 3.
Index performance is not illustrative of Fund performance. Prior to April 2, 2012, IHY had no operating history and prior to May 9, 2012 EMHY had no operating history. Source: FactSet. Fixed income investments have interest rate risk, which refers to the risk that bond prices generally fall as interest rates rise. U.S. government bonds, such as Treasuries, are guaranteed by the full faith and credit of the United States government. High-yield and investment-grade bonds are not guaranteed by the full faith and credit of the United States and carry the credit risk of the issuer. U.S. Treasuries are exempt from state and local taxes, but subject to federal taxes. Other securities listed are subject to federal, state and local taxes. Prices of equity securities change in response to many factors, including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity. Prices of bonds change in response to factors such as interest rates and issuers credit worthiness, among others. Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, relative lack of information, relatively low market liquidity and the potential lack of strict financial and accounting controls. Investing in smaller companies involves risks not associated with investing in more established companies such as business risk, stock price fluctuations and illiquidity. Correlation is a statistical measure of how two investments move in relation to one another. A correlation of +1.00 indicates the securities will move in lockstep. A correlation of -1.00 indicates the securities will move in opposite directions. A correlation of 0.00 indicates the securities movements are random. For illustrative purposes only. Historical information is not indicative of future results; current data may differ from data quoted. Indexes are unmanaged and are not securities in which an investment can be made. Diversification does not assure a profit nor protect against loss. See index descriptions on slide 21. See disclaimers on pages 2 and 3.
6 4 2 0 -2 -4 -6
International Developed M arket Stocks U.S. Small-Cap Stocks U.S. Large-Cap Stocks
10
15
20
25
Index performance is not illustrative of Fund performance. Prior to April 2, 2012, IHY had no operating history and prior to May 9, 2012 EMHY had no operating history. Source: FactSet. Fixed income investments have interest rate risk, which refers to the risk that bond prices generally fall as interest rates rise. Prices of equity securities change in response to many factors, including the historical and prospective earnings of the issuer, the value of its assets, general economic conditions, interest rates, investor perceptions and market liquidity. Prices of bonds change in response to factors such as interest rates and issuers credit worthiness, among others. Foreign securities have additional risks, including exchange rate changes, political and economic upheaval, relative lack of information, relatively low market liquidity and the potential lack of strict financial and accounting controls. Investing in smaller companies involves risks not associated with investing in more established companies such as business risk, stock price fluctuations and illiquidity. Standard deviation is the statistical measure of the historical volatility of a portfolio. For illustrative purposes only. Historical information is not indicative of future results; current data may differ from data quoted. Indexes are unmanaged and are not securities in which an investment can be made. See index descriptions on slide 21. See disclaimers on pages 2 and 3.
8.59
8.39
Percent
6 5 4 3 2 U.S. High-Yield Corporate Bonds International High-Yield Corporate Bonds (ex U.S.) Emerging Market High-Yield Corporate Bonds
4.85 4.08
4.34
Source: Bank of America Merrill Lynch Yield to worst is generally defined as being the lowest yield that a buyer can expect to receive. Modified Duration measures the responsiveness of a bonds price to interest rate changes. It is defined as the percentage change in price for a 100 basis point change in interest rates. Yield and duration figures based on BofA Merrill Lynch U.S. High Yield Master II Index, BofA Merrill Lynch Global ex-US Issuers High Yield Constrained Index and BofA Merrill Lynch High Yield US Emerging Markets Liquid Corporate Plus Index. Indexes are unmanaged and are not securities in which an investment can be made. Index performance is not illustrative of Fund performance. Prior to April 2, 2012, IHY had no operating history and prior to May 9, 2012 EMHY had no operating history. See index descriptions on page 21. See disclaimers on pages 2 and 3. 10
6.8 6.7 6.6 6.5 6.4 6.3 6.2 6.1 4 5 6 100% U.S. Treasuries 7 8 Risk (Annualized Standard Deviation) 9 10 11 39% allocation to global high-yield corporate bonds proved to be portfolio with lowest risk
Index performance is not illustrative of Fund performance. Prior to April 2, 2012, IHY had no operating history and prior to May 9, 2012 EMHY had no operating history. Source: FactSet. The chart displays the return and standard deviation of various portfolios allocations of global high yield bonds and 10-Year U.S. Treasuries as measured by The BofA Merrill Lynch Global High Yield Index and The BofA Merrill Lynch U.S. Treasuries Current 10Y Index. Portfolios range from 100% global high yield bonds to 100% U.S. Treasuries. U.S. Treasuries, are guaranteed by the full faith and credit of the United States government. Corporate high-yield bonds are not guaranteed by the full faith and credit of the United States and carry the credit risk of the issuer. Standard deviation is the statistical measure of the historical volatility of a portfolio. Efficient frontier: a set of portfolios that each maximize expected return for a given level of risk. For illustrative purposes only. Historical information is not indicative of future results; current data may differ from data quoted. Indexes are unmanaged and are not securities in which an investment can be made. See index descriptions on slide 21. See disclaimers on pages 2 and 3.
11
Median Annual High-Yield Corporate Default Rate 1981-2011 Region U.S. and Tax Havens Europe Emerging Markets Other Developed Default Rate 3.64% 1.75% 1.55% 4.17%
Sources: Standard & Poor's Global Fixed Income Research and Standard & Poor's CreditPro; 2011 Annual Global Corporate Default Study and Rating Transitions. Study includes over 12,000 bond issuers. U.S. and Tax Havens: U.S., Bermuda, and the Cayman Islands. Europe: Austria, Belgium, Bulgaria, Channel Islands, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, Switzerland, and the U.K. Emerging Markets: Argentina, Bahamas, Bahrain, Barbados, Belize, Bolivia, Brazil, British Virgin Islands, Bulgaria, Chile, China, Colombia, Costa Rica, Croatia, Cyprus, Czech Republic, Dominican Republic, Egypt, El Salvador, Estonia, Fiji, Georgia, Gibraltar, Guatemala, Hong Kong, Hungary, India, Indonesia, Israel, Jamaica, Jordan, Kazakhstan, Korea, Republic of, Kuwait, Latvia, Lebanon, Liberia, Lithuania, Malaysia, Marshall Islands, Mauritius, Mexico, Mongolia, Morocco, Netherlands Antilles, Nigeria, Oman, Pakistan, Panama, Papua New Guinea, Paraguay, Peru, Philippines, Poland, Qatar, Romania, Russian Federation, Saint Helena, Saudi Arabia, Singapore, Slovakia, Slovenia, South Africa, Sri Lanka, Taiwan, Thailand, Trinidad and Tobago, Tunisia, Turkey, Ukraine, United Arab Emirates, Uruguay, Vanuatu, and Venezuela. Other Developed: Australia, Canada, Japan, and New Zealand.
12
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
13
*IMF Projections Source: Source: IMF, World Economic Outlook (April 2012). Regional categories as determined by the IMF. Gross Domestic Product (GDP) is a broad measure of the economy that measures the retail value of goods and services produced in a country. Debt-to-GDP Ratio is a measure of a countrys government debt divided by its GDP. See disclaimers on pages 2 and 3.
2017
Source: J.P. Morgan and Bank of America Merrill Lynch. Market value based on J.P. Morgan Emerging Markets Bond Index, J.P. Morgan Government Bond Index-Emerging Markets Index and The BofA Merrill Lynch US Emerging Markets Liquid Corporate Plus Index. Indexes are unmanaged and are not securities in which an investment can be made. Local currency bonds are debt instruments that are denominated in the issuers own domestic market and currency. See index descriptions on page 21 See disclaimers on pages 2 and 3.
14
The Market Vectors International High Yield Bond ETF (IHY) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of The BofA Merrill Lynch Global ex-US Issuers High Yield Constrained Index (HXUS). The Index is comprised of below investment-grade debt issued by corporations located throughout the world (which may include emerging market countries) excluding the United States, denominated in euros, U.S. dollars, Canadian dollars or British pound sterling issued in the major domestic or Eurobond markets. Fund Characteristics Fund Ticker Intraday NAV Ticker Index Ticker Commencement Date Gross Expense Ratio Net Expense Ratio1 Exchange Anticipated Dividend Frequency IHY IHY.IV HXUS 4/2/2012 0.53% 0.40% NYSE Arca Monthly Diversify your high-yield exposure Many high-yield investors may be missing out on the internationally issued high-yield corporate bond market, which represents one-third of the total corporate high-yield bond market2 Potential for higher yield and total return International high-yield corporate bonds currently have higher yields than U.S. high-yield corporate bonds2 Historically lower default rates International high-yield corporate bonds historically have experienced lower default rates than U.S. high-yield corporate bonds3
for the Fund are capped contractually until 09/01/2013. Cap excludes certain expenses, such as interest. represented by The BofA Merrill Lynch Global ex-US Issuers High Yield Constrained Index for international high-yield corporate bonds, and The BofA Merrill Lynch U.S. High Yield Master Index II for U.S. high-yield corporate bonds. 3Source: Standard & Poors Global Fixed Income Research and Standard & Poors CreditPro; 2011 Annual Global Corporate Default Study and Rating Transitions. All information as of 5/7/2012 and subject to change. Indexes are unmanaged and are not securities in which an investment can be made. See disclaimers on pages 2 and 3.
2As
1Expenses
15
BofA Merrill Lynch Global ex-US Issuers High Yield Constrained Index
Index Characteristics Average Yield to Worst Average Modified Duration Average Years to Maturity Average Coupon Number of Issues Index Credit Quality BB B CCC CC C D 60.30% 34.34% 5.06% 0.17% 0.06% 0.07% Index Country Breakdown Developed Emerging Markets 65.74% 34.26% 8.59% 4.08 8.74 7.68% 1039 Index Maturity Breakdown
Years 10+ 7-10 5-7 3-5 0-3 0% 5% 10% 15% 18.25% 20% 25% 30% 35% 3.45% 20.10% 29.18% 29.01%
All information as of 4/30/2012 and subject to change. All figures are based on the Funds index and do not represent characteristics of the Fund. Indexes are unmanaged and are not securities in which an investment can be made. Averages are market weighted. Yield to Worst is generally defined as being the lowest yield that a buyer can expect to receive. Modified Duration measures the responsiveness of a bonds price to interest rate changes. It is defined as the percentage change in price for a 100 basis point change in interest rates. Years to Maturity is a measure of the time period, in years, until a bond matures. Standard and Poors Credit Ratings: credit ratings of A or better are considered to be high credit quality; credit ratings of BBB are good credit quality and the lowest category of investment grade; credit ratings BB and below are lower-rated securities (high yield); and credit ratings of CCC or below have high default risk. Equivalent Fitch and Moodys ratings are BB/Ba, B/B, CCC/Caa, CC/Ca, C/Ca and D/C. See disclaimers on pages 2 and 3.
16
BofA Merrill Lynch Global ex-US Issuers High Yield Constrained Index
Index EM/Developed Breakdown Developed Emerging Markets 65.74% 34.26%
Currency Industry Breakdown (%) Financial Banking Financial Services Insurance Industrials Automotive Basic Industry Capital Goods Consumer Cyclical Consumer Non-Cyclical Energy Healthcare Media Real Estate Services Technology & Electronics Telecommunications Utility Utility CAD 0.10 0.10 --1.45 -0.29 0.03 0.04 -0.46 -0.43 -0.21 --0.03 0.03 1.58 EUR 7.84 6.12 1.30 0.42 28.70 5.62 6.72 2.42 0.78 1.15 0.58 1.20 3.32 0.17 3.34 0.30 3.13 1.17 1.17 37.71 GBP 1.48 1.19 0.13 0.16 3.67 0.51 0.36 0.12 0.56 0.21 0.09 0.30 0.46 0.12 0.77 -0.16 0.36 0.36 5.51 USD 12.22 11.42 0.62 0.18 39.42 0.51 11.35 1.35 0.61 2.12 6.73 1.93 2.41 3.07 3.76 0.85 4.73 3.55 3.55 55.19 Total 21.64 18.83 2.04 0.77 73.25 6.63 18.72 3.91 2.00 3.47 7.85 3.43 6.62 3.36 8.08 1.14 8.01 5.11 5.11 100.00
Index Top 10 Country Breakdown United Kingdom France Germany Canada Italy Russian Federation Brazil Luxembourg China Netherlands Total Remaining 59 Countries 10.86% 8.93% 8.21% 7.05% 6.45% 5.11% 5.01% 3.44% 3.42% 3.37% 61.85% 38.15%
Total
All information as of 4/30/2012 and subject to change. All figures are based on the Funds index and do not represent characteristics of the Fund. Indexes are unmanaged and are not securities in which an investment can be made. See disclaimers on pages 2 and 3.
17
First EM corporate high-yield bond ETF HYEM HYEM.IV EMHY 5/9/2012 0.53% 0.40% NYSE Arca Monthly First ETF to focus solely on the U.S. dollar (USD)-denominated nonsovereign segment of the EM high-yield bond marketa market segment that has grown by 265% since 2003 and now accounts for over 10% of the global high yield corporate bond market.3 Currently higher yields than EM sovereign and U.S. corporate bonds USD-denominated EM high-yield corporate bonds currently generate higher yields than both USD-denominated EM sovereign bonds and U.S. high-yield corporate bonds.3 Historically lower default rates than U.S. corporate bonds EM high-yield corporate bonds historically have experienced lower default rates than U.S. high-yield corporate bonds.4
FX G10 is defined as Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, Switzerland, the United Kingdom and the United States for the Fund are capped contractually until 09/01/2013. Cap excludes certain expenses, such as interest. 3As represented by The BofA Merrill Lynch Global High Yield Index for global high-yield corporate bonds, The BofA Merrill Lynch High Yield US Emerging Markets Liquid Corporate Plus Index for USDdenominated EM high-yield corporate bonds, The BofA Merrill Lynch USD Emerging Markets Sovereigns Index for USD-denominated EM high-yield sovereign bonds and The BofA Merrill Lynch U.S. High Yield Master Index II for U.S. high yield corporate bonds. 4Source: Standard & Poors Global Fixed Income Research and Standard & Poors CreditPro; 2011 Annual Global Corporate Default Study and Rating Transition All information as of 5/7/12 and subject to change. Indexes are unmanaged and are not securities in which an investment can be made. See disclaimers on pages 2 and 3.
2Expenses
18
All information as of 4/30/2012 and subject to change. All figures are based on the Funds index and do not represent characteristics of the Fund. Indexes are unmanaged and are not securities in which an investment can be made. Averages are market weighted. Yield to Worst is generally defined as being the lowest yield that a buyer can expect to receive. Modified Duration measures the responsiveness of a bonds price to interest rate changes. It is defined as the percentage change in price for a 100 basis point change in interest rates. Years to Maturity is a measure of the time period, in years, until a bond matures. Standard and Poors Credit Ratings: credit ratings of A or better are considered to be high credit quality; credit ratings of BBB are good credit quality and the lowest category of investment grade; credit ratings BB and below are lower-rated securities (high yield); and credit ratings of CCC or below have high default risk. Equivalent Fitch and Moodys ratings are BB/Ba, B/B, CCC/Caa, CC/Ca, C/Ca and D/C. See disclaimers on pages 2 and 3.
19
All information as of 4/30/2012 and subject to change. All figures are based on the Funds index and do not represent characteristics of the Fund. Indexes are unmanaged and are not securities in which an investment can be made. See disclaimers on pages 2 and 3.
20
Index Descriptions
The indices listed are unmanaged indices and do not reflect the payment of transaction costs, advisory fees or expenses that are associated with an investment in the Fund. An indexs performance is not illustrative of the Funds performance. Indices are not securities in which investments can be made. Global High-Yield Corporate Bonds: BofA Merill Lynch Global High Yield Index tracks the performance of USD, CAD, GBP and EUR denominated below investment grade corporate debt publicly issued in the major domestic or eurobond markets. International High-Yield Corporate Bonds: BofA Merrill Lynch Global ex-US Issuers High Yield Constrained Index (HXUS). The Index is comprised of below investment-grade debt issued by corporations located throughout the world (which may include emerging market countries) excluding the United States, denominated in euros, U.S. dollars, Canadian dollars or British pound sterling issued in the major domestic or Eurobond markets. USD Emerging Markets High-Yield Corporate Bonds: The BofA Merrill Lynch High Yield US Emerging Markets Liquid Corporate Plus Index (EMHY). The Index is comprised of U.S. dollardenominated bonds issued by non-sovereign emerging market issuers that are rated below investment grade and issued in the major domestic or eurobond markets. U.S. High-Yield Corporate Bonds: BofA Merrill Lynch U.S. High Yield Master II Index tracks the performance of US dollar denominated below investment grade corporate debt publicly issued in the US domestic market. Global Investment Grade Bonds: BofA Merrill Lynch Global Broad Market Index tracks the performance of investment grade debt publicly issued in the major domestic and eurobond markets, including sovereign, quasi-government, corporate, securitized and collateralized securities. U.S. Investment Grade Bonds: BofA Merrill Lynch U.S. Broad Market Index tracks the performance of US dollar denominated investment grade debt publicly issued in the US domestic market, including US Treasury, quasi-government, corporate, securitized and collateralized securities. U.S. Treasuries: BofA Merrill Lynch Current 10-Year US Treasury Index is a one-security index comprised of the most recently issued 10-year US Treasury note. The index is rebalanced monthly. In order to qualify for inclusion, a 10-year note must be auctioned on or before the third business day before the last business day of the month. U.S. Large-Cap Stocks: S&P 500 Index consists of 500 widely held common stocks covering industrial, utility, financial and transportation sectors. U.S. Small-Cap Stocks: Russell 2000 Index measures the performance of U.S. small cap stocks: the 2000 smallest companies in the Russell 3000 index, a broad based index that represents approximately 98% of the value of the investable U.S. equity market. International Developed Market Stocks: MSCI EAFE Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the US & Canada. The MSCI EAFE Index consists of the following 22 developed market country indices: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom. Emerging Market Stocks: MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets. The MSCI Emerging Markets Index consists of the following 21 emerging market country indices: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey. Leveraged Loans: Leveraged loan data are from Dealogic and are defined primarily as coming from a leveraged or highly leveraged European deal; loan tranches must have sub-investment grade ratings, or, if unrated, a margin spread minimum of 125 basis points over a benchmark (e.g., Euribor, LIBOR). Under these guidelines, sub-investment grade-rated loans with a margin spread of less than 125 basis points are included. Deals must be European and are inclusive of both developed and emerging market Europe as defined in high yield criteria in Section 3. Deals must also be marketed either in Europe or in the United States. Loans not EUR-denominated are converted to EUR as of credit date for purposes of aggregation. Aggregates include new money as well as non-new money deals. USD Emerging Market Sovereign Bonds: J.P. Morgan Emerging Markets Bond Index (EMBI) tracks total returns for USD-denominated debt issued by emerging market sovereign entities. Local Currency Emerging Market Sovereign Bonds: J.P. Morgan Government Bond Index-Emerging Markets (GBI-EM) tracks regularly traded, liquid, fixed-rate, domestic currency debt issues by emerging market governments. USD Emerging Market Corporate Bonds: The BofA Merrill Lynch US Emerging Markets Liquid Corporate Plus Index tracks U.S. dollar denominated emerging markets non-sovereign debt.
21