Daily ETF Watch: New Korea Equity Fund

Horizons continues its push into the U.S. ETF market with a Korea-focused large-cap fund.

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Reviewed by: Hung Tran
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Edited by: Hung Tran

Horizons continues its push into the U.S. ETF market with a Korea-focused large-cap fund.

Horizons ETF Trust today is launching the Horizons Korea KOSPI 200 ETF (HKOR), one of three country-specific ETFs that the firm is looking to bring to market at a time when emerging market stocks remain under pressure as the Federal Reserve beings to wind down its economic stimulus.

The Korea KOSPI 200 ETF will track the KOSPI 200 Index, a free-float-adjusted, market-capitalization-weighted index comprising 200 blue chip companies listed on the Korea Stock Market based on their market and sector representation and liquidity.

The Federal Reserve’s newly minted Chair Janet Yellen has promised to keep short-term rates at ultra-low levels in 2014 and beyond, even as the central bank continues to taper its “quantitative easing” economic stimulus, keeping investors’ focus on alternative-income plays in all corners of the ETF space, including emerging markets.

The Horizons fund will have an annual expense ratio of 0.38 percent, or $38 for every $10,000 invested, and will be listed on the NYSE Arca, according to a NYSE communique.

A-Shares ETF Launch

KraneShares on Wednesday, March 5, is launching its KraneShares Bosera MSCI China A Share ETF (KBA) that will invest directly in mainland securities, a growing trend among ETF issuers.

The fund will track the MSCI China A Index, a free-float-adjusted market-capitalization-weighted index that will give investors exposure to large-cap and midcap Chinese securities, according to a regulatory filing.

KraneShares has teamed up with a local advisor, Bosera Asset Management, to gain direct access to the mainland market via an initial renminbi qualified foreign institutional investor (RQFII) quota of 1 billion RMB ($163 million).

“Renminbi qualified foreign institutional investor ETFs are a new breed of funds in the U.S., capable of directly holding mainland China-listed ‘A-shares,’ as opposed to using derivatives to capture the fairly restricted market,” ETF.com ETF specialist Dennis Hudachek wrote in a recent blog.

KBA has an annual expense ratio of 1.10 percent, or $110 for every $10,000 invested.

KraneShares’ latest offering follows the launch of the first-to-market db X-trackers Harvest CSI 300 China A-shares Fund (ASHR) last November. ASHR now has $167 million in assets under management, according to data compiled by ETF.com Analytics.

And with more offerings in the works from DB and Market Vectors, Hudachek said investors can expect a flood of mainland China-focused-ETF launches in the coming years.

Filings

  • Effective May 1, the Market Vectors RVE Hard Assets Producers ETF (HAP | B-80) will have a new name: The fund is changing its name to the Market Vectors Natural Resources ETF. At that time, the name of the fund’s index will change from the Rogers-Van Eck Hard Assets Producers Index to the Rogers-Van Eck Natural Resources Index, according to a regulatory filing.
  • ProShares has updated regulatory paperwork to include a ticker for its proposed ProShares USD Emerging Markets Bond–Interest Rate Hedged ETF (EMHG), which will track the USD Emerging Markets (Treasury Rate-Hedged) Index. The index comprises long positions in a diversified portfolio of USD emerging market bonds and short positions in U.S. Treasury notes or bonds.

 

 

     

    Hung Tran is a former staff writer for etf.com.