SSgA Plans MSCI-Based Beyond-BRIC ETF

By
Hung Tran
August 28, 2013
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SSgA is taking a page from Emerging Global’s playbook with plans for a beyond-BRICs ETF.

SSgA filed regulatory paperwork detailing an emerging market ETF that will eschew Brazil, Russia, India and China for less popular investment destinations in the developing world, following a trend of ETF issuers who are looking to offer next-generation products that steer clear of emerging market strategies favoring those so-called BRIC countries.

The proposed SPDR MSCI Beyond BRIC ETF (EMBB) will track the MSCI Beyond BRIC Index, according to the preliminary prospectus, which follows by a year the launch of the pioneering fund in the space the EGShares Beyond BRICs ETF (BBRC | F-42).

The SSgA fund will use American depositary receipts and global depositary receipts of issuers from Chile, Colombia, the Czech Republic, Egypt, Hungary, Indonesia, Malaysia, Mexico, Morocco, Peru, the Philippines, Poland, South Africa, South Korea, Taiwan, Thailand and Turkey.

The EGShares product targets many of the same non-BRIC countries—with notable exceptions being South Korea and Taiwan and, interestingly, the emerging global ETF will begin incorporating frontier-market holdings as part of an index change that will take effect in October.

SSgA’s decision to laid the groundwork for a “beyond BRICs” strategy—and Emerging Global’s plan to tinker with BBRC come at a time when emerging markets asset prices have cratered for reasons ranging from the slowdown in China, to middle-class unrest in places like Turkey and Brazil, to the prospect of an end to the Fed’s easy-money policies. All that has hurt the allure of emerging markets, and some sponsors are now tinkering with or adding strategies.

SSgA didn’t say how much the new Beyond BRICs ETF might cost, but Emerging Global’s BBRC comes in at 0.85 percent a year, or $85 for each $10,000 invested.

 

ETF DAILY DATA

'HEDJ,' the euro-hedged equity fund, added $199 million on Friday, Jan. 23, as total U.S.-listed ETF assets ended the day at $2.016 trillion.

'IWM,' 'HYG' and 'EEM' paced iShares' issuer-leading inflows on Friday, Jan. 23, as total U.S.-listed ETF assets rose to $2.106 trillion.

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