Daily ETF Watch: SSgA Goes Beyond BRICs

December 05, 2013

The fund company seeks less popular developing-world investment locales.

State Street Global Advisors today is launching the SPDR MSCI EM Beyond BRIC ETF (EMBB), an answer to Emerging Global Advisors’ EGShares Beyond BRICs ETF (BBRC | F-47). The two funds slice and dice the emerging markets in new ways.

EMBB will avoid the so-called BRIC countries of Brazil, Russia, India and China in favor of 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 centering on BRIC countries.

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. Its expense ratio is 0.55 percent, or $55 for every $10,000 invested.

SSgA’s decision to launch EMBB comes at a timea when emerging markets asset prices have come under pressure due to the slowdown in China, middle-class unrest in places like Brazil and, not least, the prospect of an end to the Federal Reserve’s easy-money policies in the past five years since the market collapse of 2008-2009.

Dennis Hudachek, an ETF analyst at IndexUniverse, noted that EMBB’s exposure to South Korea and Taiwan differentiates it from Emerging Global’s BBRC, which does not own stocks from those two Asian countries.

“Those really are the main differences, but those are very big differences because they totally change the composition of the funds,” said Hudachek.

Filings

1. Vident Financial, on the heels of the launch of its maiden ETF, has filed to offer the Vident Core U.S. Equity Fund (VUSE) on the Nasdaq exchange. VUSE will track the Vident Core U.S. Equity Index, a rules-based index that measures the performance of U.S. companies based on “a demonstrated commitment to high standards of corporate governance, financial reporting and managerial stewardship,” according to the filing. The fund carries an expense ratio of 0.55 percent, or $55 for every $10,000 invested.

2. Van Eck Global looks likely to launch in 2014 four enhanced-beta ETFs that screen securities in international and emerging markets for “quality”—a term in the investment world that refers to stocks with high returns on equity, stable year-over-year earnings growth and low financial leverage. The four funds include:

 

  • Market Vectors MSCI Emerging Markets Quality ETF
  • Market Vectors MSCI Emerging markets Quality Dividend ETF
  • Market Vectors MSCI International Quality ETF
  • Market Vectors MSCI International Quality Dividend ETF

3. The PowerShares China A-Share Portfolio (CHNA), which launched in October, is upping its expense ratio to reflect its investment in other funds, dubbed “acquired fund fees.” According to a filing, the fund’s fees inched up to 0.51 percent, or $51 for every $10,000 invested, from 0.50 percent.

 

 

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